Dominique Van Voorhis, the vice-president of industrial engineering and operations systems for Grocery Gateway has been asked to make recommendations aimed at improving delivery operations at the weekly management meeting in seven days. There he will need to present his new ideas to the CEO and COO of Grocery Gateway.
Dominique has already gathered the delivery time information as well as current average orders being placed. He’s been able to identify that it takes 15 minutes for set up, 30 minutes for stem time, 30 minutes to return to the centre and 15 minutes for close out. Also, 10 minutes were included to meet with the customer of ...view middle of the document...
With the implementation of extending the driver shifts and increasing the delivery charges, Grocery Gateway would be increasing their deliverable opportunities as well as earning more from each delivery. This would assist in the profit of their business but potentially causing dissatisfaction with both their employees as well as their customers; two of the most important aspects of any company.
Dominique Van Voorhis, vice-president of industrial engineering and operations systems for Grocery Gateway, has been asked by the chief executive office and chief operating office to provide recommendation aimed at improving the delivery operations at the Downsview Ontario customer fulfillment centre.
Two key areas where improvements are needed are with Grocery Gateway’s delivery operations to achieve 4 stops per hour on area (SPHOA) and to reduce delivery windows to 30 minutes. The Downsview fulfillment centre is currently achieving only 2.7 SPHOA and the company offers a 90 minute delivery window.
Dominique also needs to consider the current business plan objectives when making his recommendations. A major objective of the plan is aggressive growth. Grocery Gateway has a target of 5,000 orders per day within 3 years. The Downsview centre currently achieves 1,500 orders per day.
Dominique has only 7 days to come up with a plan before he has to present his recommendations at the management meeting.
Grocery Gateways overall objective is to provide a high quality, reliable and prompt delivery service at a low cost to its customer base. In order to do so they must achieve delivery within tight windows to a densely populated delivery service area.
More specifically, they are trying to become cash flow positive on a variable cost basis while at the same time fine-tuning the operation side if things. Currently, their logistics operations are not achieving the desired delivery times of 4 stops per hour on area (SPHOA), therefore, their current goal is to achieve the 4 SPHOA while simultaneously reducing deliver windows to 30 minutes. They must effectively devise a plan that optimizes their logistic operations to ensure meeting the 30 minute delivery window to allow them to deliver the long term target of 5,000 orders per day.
Grocery Gateway was founded in 1997 by Bill Di Nardo. Since August 2004 it has been operated by Longos Brothers Fruit Market Inc. It is Canada’s largest direct online grocer with 15,000 active customers making 500 stops a day. They offer approximately 6,500 products including fresh meats, produce and organic produce.
In May 2000 they raised $33ML in second phase venture capital. In total they were successful in raising $70ML in private sector financing. This enabled them to move to a 26,000 square meter facility in Downsview. The move and design of the building and it’s capacity to support future...