Distribution Network Design at Boxed, Whole foods, and Walmart

Different companies have different distribution network designs. Each company strives to gain a competitive advantage through the distribution design by offering the best services on time and at the lowest cost possible. This paper examines the distribution network designs of Boxed, Whole Foods, and Walmart Companies. Boxed is one of the companies that have fast evolved within a very short period and has grabbed a significant portion of the American market. One of the major factors that have made its expansion possible is its distribution network. According to HBS Digital Initiative (2015), Boxed’s owner launched it with only one warehouse in New Jersey, and as of 2015, it had expanded its distribution centers with three more. This has seen the company delivering requested products to its customers within a short time.

Additionally, in August 2018, Boxed raised $111 million to expand its fulfillment centers, including distribution centers (Digital commerce, 2018). Boxed CEO said that the funds would set up a fifth distribution center in Chicago, alongside New Jersey, Texas, Nevada, and Georgia. Also, the company’s fulfillment centers use robots to meet customers’ demands with efficiency. Using robots is a form of Artificial Intelligence (AI), which is faster and efficient (Alsamhi et al., 2019, p.483-503). Lastly, Boxed’s distribution network works under customer’s demands. It asks customers to schedule their delivery time and deliver the requested products at the customers’ chosen time.

Whole foods use a retail distribution channel (producer- retailer-consumer) and deal directly with its suppliers. Goods are picked from the manufacturing center to the retail stores across America, where they are delivered to customers, or offline customers shop at the stores. It has increased the number of retail distribution centers. It has eleven distribution centers across America in which each store has been given authority to source a product mix that best suits its location in its ways. However, the stores are prohibited from stocking goods with artificial flavors, colors, preservatives, sweeteners, or hydrogenated oils (lumen learning, 2016).

According to the company’s website, the company fills the stores and ensures each item is placed on the shelf. The website also states that the logistics chain is vast and detailed for an efficient customer experience (Wholefoods market.com, 2020). A SWOT study conducted indicated that Wholefoods has a limited network of suppliers (Gregory, 2017). A limited number of suppliers can prevent an organization from expanding its operations (Dedrick et al., 2008, p.41-72).

Walmart uses a retail distribution network with several supply chains of its products. Some of the supply chains include; grocery, fashion, footwear, import and exports, and pharmacy. As of January 2021, Walmart’s retail store and distribution network cover 783 million and 143 million feet square for a total of 926 million square feet (Mwpvl, 2021). For Walmart, no inventory is stored at the retailer stores. Goods are transported directly from the manufacturers and the warehouses to the stores. Due to this, Walmart has invested in its logistics system, having a fleet of over 6,500 trucks.

According to Walmart.com (n.d), the company started with a single retailer in Rogers, Ark, and so far, it has approximately 11,400 stores under 55 banners in 26 countries. According to the company, the purpose of having many distribution centers is to create a seamless experience for customers to enjoy shopping anywhere at any time. A study conducted by geographers Matthew Zook and Mark Graham indicated that 60 % of Americans live only 5 miles away from a Walmart store, while 96% are within 20 miles (LeCavalier, 2010, p.2).. It implies that Walmart stores are widely spread across America

References

Alsamhi, S. H., Ma, O., & Ansari, M. S. (2019). Survey on artificial intelligence based techniques for emerging robotic communication. Telecommunication Systems, 72(3), 483-503. https://doi.org/10.1007/s11235-019-00561-z

Dedrick, J., Xu, S., & Zhu, K. (2008). How Does Information Technology Shape Supply-Chain Structure? Evidence on the Number of Suppliers. Journal Of Management Information Systems, 25(2), 41-72. https://doi.org/10.2753/mis0742-1222250203

Digital Commerce. (2018, August 23). Boxed raises $111 million in additional funding and plans to expand fulfillment operations. Digital Commerce 360. https://www.digitalcommerce360.com/2018/08/23/boxed-raises-111-million-in-additional-funding-and-plans-to-expand-fulfillment-operations/

Gregory, L. (2017, January 31). Whole Foods market SWOT analysis & recommendations. Panmore Institute. https://panmore.com/whole-foods-market-swot-analysis-recommendations

HBS Digital Initiative. (2015, December 9). Boxed: Love that bulk! Technology and Operations Management. https://digital.hbs.edu/platform-rctom/submission/boxed-love-that-bulk/

LeCavalier, J. (2010). All those numbers: Logistics, territory and Walmart. Places Journal, (2010). https://doi.org/10.22269/100524

Lumen learning. (2016). Putting it together: Place: Distribution channels | Principles of marketing [Deprecated]. Lumen Learning – Simple Book Production. https://courses.lumenlearning.com/marketing-spring2016/chapter/putting-it-together-place-distribution-channels/

MWPVL. (2021). Walmart distribution center network USA | MWPVL. Supply Chain Consultants | Logistics Consulting | MWPVL. https://mwpvl.com/html/walmart.html

Whole foods market.com. (2020, November 12). Distribution and facilities | Whole Foods market careers. Whole Foods Market. https://careers.wholefoodsmarket.com/distribution/global/en