Amazon, the 50,000 pound retail, order fulfillment and logistics setting guerilla is now officially in the house! Actually Amazon is exerting their market leadership position by setting the tone and standards that all organizations will be measured by and your customers will demand.
From Click to Pick to Delivery in 30 Minutes
Forget next and same day delivery (which was quite the logistics mountain to climb) we are now talking about 30 minute deliveries. Bezos is talking about 2015 for the program to start. I would be surprised if its 2020 before it has any critical mass with FAA and local zoning codes, but it’s the proverbial stake in the ground. It defines what every other B2B and B2C organization will be defined by over the next few years.
For those of you who might not have seen the 60 minutes piece, Jeff Bezos, Amazon CEO, demonstrated the Air Prime drone delivery system. An octocopter drone sitting at the end of the conveyor picks up a tote of five pounds or less and automatically takes off and delivers it to the customer’s home. Since 86 percent of Amazon’s orders are five pounds or less you are talking about a huge percentage. Likewise, when you consider that on Cyber Monday, Amazon is expecting 300 orders per second! We are talking about drone flights which might look more like locust infestations on some days.
This is cool and it might take time to truly implement and be felt, but the expectations that are being created within the entire market place is monumental. This is something like years ago when a company announced you could send a letter or package from coast to coast using their newly invented Pony Express system. We laugh today, but it was ground breaking in its availability and cost being affordable to the average person. This is the type of magnitude we are looking at.
Now that the guerilla in the room has spoken, what do you do? Every organization should look at its existing industry and practices and see how you are going to step up your operations to meet your customers’ expectations before others do. That other could be a long time industry foe or you could find yourself against Amazon itself. Look at their move into parts distribution and its impact to that marketplace.
Best idea is to evaluate what you are doing and what it would take to step up your operations to the next level. Look at improving labor rates, accuracy levels, use of existing floor space, extending order cut-off times and faster customer delivery. Odds are this steps you can implement will create the cost savings to justify them. Do a labor and space survey or ask a leading consultant and integrator to one for you such as ISD. Start making and implementing your plans, otherwise the drones might get you.