Tag: eBay

OM in the News: The Critical Last Mile at eBay

eaby nowThere’s a hot new job in tech: delivery guy. As the holiday shopping season gets underway, same-day delivery has become a new battleground for e-commerce, reports The New York Times (Nov.24, 2013). For all the sophisticated algorithms and proprietary logistics software involved, many services come down to “valets,” who race to a store, scan the aisles for the requested items, buy them and rush them to the customer. The app for eBay Now, the company’s local shopping service, promises that valets will complete a shop-and-drop-off not just in the same day but “in about an hour,” a timetable crucial to the company’s intensifying efforts to one-up Amazon in the delivery game.

It wasn’t so long ago that overnight delivery seemed amazing enough. Then Amazon started building huge “fulfillment centers” near major U.S. cities to be as close to customers as possible. With 40 such centers encompassing more than 80 million square feet and employing 20,000 full-time workers, Amazon offers same-day delivery in 11 cities.

EBay, which last month announced plans to expand eBay Now to 25 cities, has a different model: use existing stores or “retail partners” as distribution centers and beat Amazon in the race against the clock. The personal, labor-intensive valet approach doesn’t translate easily into profit. “You just can’t get any hourly worker to do this — you need someone with a work ethic and a willingness to go out of the standard operating procedure to delight the customer,” said a Forrester Research analyst. “It is an H.R. issue, not a tech issue. Many of these companies are coming at it from a tech standpoint. One thing Amazon has done very successfully, is they’ve owned the entire value chain. They’ve owned the last mile, the moment when the package arrives. Once you can own the moment that matters, you build a loyal customer base.”

There is a 2 minute video attached to the article which illustrates the eBay Now system.

Classroom discussion questions:

1. What has happened to earlier quick delivery companies?

2. What are the OM issues involved in eBay Now?

OM in the News: Sustainability and eBay Packaging

In Chapter 5 we discuss some of the easiest ways to make products more  sustainable. We can: (1) make them recyclable; (2) use recycled materials; (3) use less harmful ingredients; (4) use lighter materials; (5) use less energy; and (6) use less material. MITSloan Management Review (Aug. 11, 2011–E Newsletter) describes how eBay has made its packing boxes more sustainable by using almost all of these approaches. In doing so, the online auction company has come up with a solution that not only feeds on people’s desire to recycle, but helps brand the business as sensitive to the environment.

The eBay box is made of especially durable cardboard. Covered in graphics of birds and trees, it has text all over that basically says: “this box has been designed to be used over and over”. The inside of the lid even has spaces where users can leave notes where the box has been, essentially inviting recipients to celebrate the fact that the box has been used and reused.

The idea bubbled up internally. The firm’s Green Team is tasked with “inspiring the world to buy, sell and think green every day”. Out of the 250 suggestions submitted to eBay’s annual Innovation Expo, the grand prize winner was the eBay box. The project received a prestigious Clio design award a few months ago.

By May that the company had given away 100,000 of the boxes. The Green Team reports that “each box is made of 100% recycled material, printed with water-based inks, and designed to require minimal tape”. The 1,500 boxes reused so far have “conserved almost 7,000 gallons of water, energy to power 13 homes for a week, and reduced greenhouse gasses equivalent to taking 18 cars off the road for a week”.

Discussion questions:

1. Ask students to pick another product that can be redesigned to be greener.

2. Show the Frito-Lay video on sustainability (in Ch.7) and compare that company’s packing efforts to eBay’s.