Category Archives: Retail

The Case of the Vanishing Drugs

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FEBRUARY 25, 2014

The Aethon Tug mobile robot delivering meds at U. of Maryland hospital

“Hospitals have a drug problem.,” writes The Wall Street Journal (Feb. 24, 2014),  ”and they’re looking to technology to solve it.” The problem is the way medications are being mishandled by hospital pharmacies and wards. Inventory management is inefficient, drugs are too often misplaced, and narcotic medications are prone to theft.  In addition to turning to password-protected dispensing machines, RFID tags and roaming robots to deliver prescriptions, hospitals are adopting software that tracks every dose of medication to identify suspicious activity.

By making it easier to track medicines, the changes give nurses more time to spend with patients. Mercy Hospital in St. Louis, for example, estimates that its medication-tracking system saves the hospital $600,000 a year just in time lost from pharmacists, technicians and nurses locating meds. The new systems also help improve patient safety by identifying staffers who are siphoning drugs for their own use, a problem known as “diversion.” About 15% of health-care professionals are addicted to prescription drugs at some point in their career. These drug-related inventory losses cost millions each year. The software also allow hospitals to better manage inventory by not stocking medicines that are never used, or by keeping just enough of expensive drugs on hand to meet demand.

At the University of Maryland Medical Center, mobile robots deliver medications to nursing units. Pharmacy staffers print a label, scan and place the medication in one of the robot’s locked drawers, and then enter a destination into a program that communicates wirelessly with the robot. The robot navigates its way to the right unit, where a nurse uses a passcode and fingerprint scanner to retrieve the medication. Delivery reliability—how often the drugs arrive at the unit as promised—has increased by 23%, and delivery predictability—how often they get there within the time promised—has risen by 50%. The per-trip cost with a robot averages $2.40, down from $5.50 for hand delivery, and in its first year the system freed up 6,123 hours of nurses’ time.

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.

Wal-Mart Ramps Up Global E-Commerce

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FEBRUARY 23, 2014

A worker at Wal-Mart's "dark store" in Mexico City

Wal-Mart says it has cracked the code for speedy, same-day grocery delivery—in Mexico. As retailers like Wal-Mart and Amazon.com rush to expand home delivery in the U.S. to groceries, the retail giant is looking across the border for help: Its high-end Mexican grocery chain, Superama, already delivers groceries in as little as 3 hours.

Wal-Mart has ramped up its global e-commerce operations over the past few years, writes The Wall Street Journal (Feb. 19, 2014), in hopes of catching up to online rival Amazon.com. The company vowed to match Amazon’s service offerings within 2 years. Currently, only about 2% of Wal-Mart’s sales come from the Web.

The company has been testing home-grocery delivery in Colorado and California, but it hasn’t announced a timeline for taking the service nationwide. It is also experimenting with grocery delivery in such cities as Buenos Aires and Santiago, Chile. Wal-Mart says it is “committed to being the online global leader in grocery delivery.”

Mexico provides $27 billion in sales and contributes 6% of the company’s global sales. Superama helped Wal-Mart achieve a 92% market share in the home delivery of groceries in Mexico. A fifth of its grocery orders arrive via mobile-phone apps, computers and tablets. The service is strongest in Mexico City, where much of Mexico’s wealth is concentrated. The capital’s snarled traffic and cramped grocery stores make delivery from Superama appealing for the well-to-do.

The majority of the grocery deliveries in Mexico come from supermarkets that are open to the public. But in the future, Wal-Mart de México plans to deploy more “dark stores”— spaces used exclusively to fulfill online orders. Such “closed” stores are more efficient: Wal-Mart’s inaugural dark store in Mexico City handles the same volume of orders as 5 stores open to the public.

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.

The Logistics of Valentine’s Day Roses

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FEBRUARY 15, 2014

Valentine_Rose

U.S. consumers buy the most flowers on Valentine’s and Mother’s Days–and getting fresh roses to market takes speed, the right temperature, and skill. Like all perishable products, flowers require specific temperatures to maintain freshness, without which they will lose their bloom.

Complicating this need for the ideal temperature, flowers travel a long way from field to store reports Supply Chain 24/7 (Feb. 13, 2014). Eighty percent of all flowers sold for Valentine’s Day are shipped from Latin America, with 12% coming from domestic production and 8% arriving from other locations. In 2013, 231,466 1,000-stem-count bushels of roses were imported into the U.S. from Latin America. Most of these came from Colombia (142,000) and Ecuador (79,000).

Shipping starts weeks before the holiday and the best flowers arrive early. The graphic shows the 2-week path of a rose, from the fields of Latin America to the hands of its recipient.

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.