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Grocer Gate

In: Business and Management

Submitted By shaimamajid
Words 471
Pages 2
Grocery Gateway was Canada’s largest direct online grocer which provided home delivery for approximently125000 customers in the Greater Toronto Area. The Area that was served by the company is almost 3200 square kilometers with a population of seven million people. Grocery Gateway provided 6500 different items for the online shoppers. However, the customers should buy items with a minimum price of $60 and they pay for a deliver fee of $8. The sales volumes were fluctuating and it was considered to be seasonal. During the first two years of operations the focus of Grocery Gateway was on its growth. The target was to have 5000 orders per day within three years. Moreover, the main focus was to have a positive cash flow in 2001 on a variable cost basis. In order to maintain its goal growth and fulfilling all the orders in an efficient and low cost way, Grocery Gateway relocated from 6225 square meters facility to a new 26,000 square meters facility. Grocery Gateway’s systems were based on five main systems. Only one of those systems was developed in house. Furthermore, in the existing condition Grocery Gateway delivery operations did 2.7 stops per hour on area (SPHOA), although the target is to have four stops per hour on area (SPHOA).
Dominique Van Voorhis the vice president of industrial engineering and operations in the company was asked to provide some recommendations to improve the delivery operations. Those recommendations would be presented at the next Grocery Gateway’s weekly management meeting. Several options seemed to be useful and worth further analysis. However, the chosen option should be satisfying the strategy of the company and the goal of having low cost and high service logistics execution in one market.
In order to improve the delivery operations and achieve the organization’s objectives of becoming cash flow positive in 2001 on a variable cost...

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