Grocery Gateway

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Problem Statement
Grocery Gateway would like to increase their deliveries from 2.7 to 4 per hour. Dominique Van Voorhis, vice president of industrial engineering and operations systems, must provide recommendations for improving and optimizing the delivery operations.

Situation Analysis

Grocery Gateway, founded in 1997 by Bill Nardo, is Canada’s largest direct online grocer and provides its services to residents of the Greater Toronto area (GTA). The company provides approximately 6,500 items including dry goods, health and beauty products, alcoholic beverages, fresh produce and frozen foods on their website at competitive prices.

Company Objective
Grocery Gateway provides high levels of customer service as relatively low prices but wish to improve the efficiency of their delivery service allowing them to make 4 deliveries per hour and reduce the delivery window to 30 minutes. This will help them to achieve their goal of 5,000 orders per day within 3 years.

S.W.O.T. Analysis

Grocery Gateway, the largest direct online grocer in 2001, is a well established company with 125,000 registered users. They provide a wide variety of items can be ordered from the convenience of your home and delivered right to your door. By providing a broad window of delivery times (between 6:30am and 10:30pm) and allowing payment to be made at the door makes this a convenient option for almost everyone. Grocery Gateway has a large plant with a high level of technology to organize and pick orders. They also utilize RIMMS software to calculate the most efficient routes to be used by the drivers.

Grocery Gateway requires a minimum order of $60 which could deter some consumers from ordering if they have smaller orders. With a limited number of trucks and a delivery window of 90 minutes the amount of deliveries is reduced.

With only approximately only 1.79% of the GTA utilizing this method of shopping there is potentially a large market that Grocery Gateway could obtain with the proper marketing and more efficient delivery times. Grocery Gateway could also have the ability for customers to pay for their purchases online thereby reducing the amount o time that drivers must spend at each delivery site.

There is a potential for unplanned delays that may make clients decide to no longer use Grocery Gateway and therefore business could be lost.

With the use of technology throughout the business, Grocery Gateway has been able to provide excellent customer service at a relatively low cost. The computerized delivery system provides the most cost effective route but does not take into account any unexpected delays that could affect the delivery time.

Market Analysis
The grocery market is large and used by almost every consumer to fill the need of replenishing food. There are a variety of brands and sizes of products available.

PESTE Analysis

Grocery Gateway must ensure that they adhere to food standards that are set out by Health Canada in regards to handling, storing, packaging and serving foods as well as ensuring that they are not selling alcohol to minors. Grocery Gateway must also ensure that they are following The Labour Act that regulates employee practices.

For people that reside in urban area there are many ways to cut down on expenses like using public transportation which is not always practical for transporting large amounts of groceries. Grocery Gateway offers an affordable option for people that cannot transport these items. However this type of ``luxury`` service may not be as appealing to people with low discretionary income or in poor economic times.

As a company is a diverse region, Grocery Gateway needs to ensure that they carry products that meet the needs of the different cultures in order to increase their market share.

Grocery Gateway utilizes five...
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