One of the Internet’s fastest-growing retailers is also one of its slowest shippers, reports The Wall Street Journal (May 4, 2014). The mom-focused discount site takes an average of 2-3 weeks to get merchandise to customers, well off the pace of online veterans like Amazon.com and ShopRunner Inc., which have been training shoppers to expect delivery in 2 days.

The slow shipping times are the result of a bare-bones distribution system that is enabling 4-year-old Zulily to turn a profit in an industry where some of its peers have struggled. Zulily’s sales have soared thanks to its ability to get women to browse regularly for deals and make what are largely impulse buys before the sales end.

But Zulily’s Achilles’ heel may be shipping. Last year, it took an average of 11.5 days for items to be shipped from Zulily’s warehouses after customers ordered them. The reason: Zulily doesn’t buy in advance most of the products it offers. Instead, it orders the items from vendors after the sales end. Vendors then ship the merchandise in bulk to one of two Zulily warehouses, where the products are sorted and combined with other orders before being shipped back out.

“It’s more efficient to do it this way,” says the company’s COO. It also doesn’t accept returns. He adds: “The inventory-lite model is why Zulily can afford to sell a wide range of discounted merchandise from more than 10,000 vendors.” The company has been investing in automation at the warehouses so that they can handle more inventory more quickly. “We’re always looking to improve speed and efficiency.”

Customers going to Zulily’s website don’t know ahead of time what deals they will find, and the retailer tries to work the shipping lag into its sales—for example, it is currently selling summer apparel for women and children.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.

“Another year, another breakthrough in Chipotle’s blinding burrito-making speed,” writes Quartz (April 21, 2014). Over the first 3 months of 2014, the US Mexican-food chain saw an average increase of 7 transactions per hour at both peak lunch and dinner hours—12 to 1pm and 6 to 7pm. On Fridays, one of its busiest days of the week, Chipotle fielded 11 more customers per hour at lunchtime on average across its stores, a 10% increase.

“One important element of delivering great customer service is you’ve heard us say over and over is faster throughput,” says the CEO. “We’re excited that our teams are ready to break new throughput records.” Another way to think about throughput is to think about it as burrito-velocity—that is, the speed it can funnel a customer and the burrito being made for them from the beginning of its line to its end. The chain puts every part of its assembly line under a microscope to make sure it functions as efficiently as possible.
As far as the company is concerned, faster service is the same thing as better service. For that reason, the chain is finicky about things Chipotle-lovers likely hardly even notice. Credit cards, for instance, are better than cash, because they’re faster. And that person who wanders around cleaning off counters and re-filling empty meat, vegetable, rice, and bean containers is crucial. In fact, she even has a title: linebacker. Linebackers, who patrol countertops, replace serving-ware, and refill bins of food, are one of Chipotle’s four, Maoist-sounding pillars of effective lightning-speed service. The others, which together make up what the chain refers to as its “four pillars of great throughput,” include the extra person between the one who rolls your burrito and the one who rings up your order, a commitment to having every ingredient and utensil in its place, and finally, making sure its best servers are always working at peak hours. Some of Chipotle’s fastest restaurants currently run more than 350 transactions per hour at lunchtime, which equates to nearly 6 transactions per minute!