From the Washington Post:
(Photo by A nosa disco necesítanos)
They say waiting to get something is often more enjoyable than actually getting it.
That’s not how Jeff Bezos sees it. In the last few years, the Amazon.com founder has been in relentless pursuit of a lag-less future, one where you barely have enough time to utter the word “shipping” before your package arrives. In this utopia, deliveries take place in a matter of hours, not days. To make it a reality, Bezos is bringing the full power of Amazon’s supply-chain resources to bear. The company has plowed nearly $13.9 billion since 2010 into new warehouses near its customers. It’s an undertaking only a massive multinational would dare attempt.
But a handful of smaller companies are convinced there’s a way to get products to consumers just as quickly, with greater satisfaction and at a fraction of the overall cost. The future, these companies argue, is in on-demand 3D printing.
These two ways of delivering goods couldn’t be more different. One relies on scaling and infrastructure to reduce transportation time. The other eliminates as much infrastructure as possible and instead sinks money into materials and on-site manufacturing. Yet both share a common dream: achieving a just-in-timeness never before seen in the history of commerce.
It won’t be long before these technologies start overlapping and interacting — and that’s a good thing. The resulting combinations will iron out a lot of the inefficiencies of using either method alone. But however it happens, it probably won’t be hailed as a “3D printing revolution” or as a “shipping revolution.” It might simply be known as the just-in-time revolution.
The race to ‘instant’
Amazon is merely one of a growing number of businesses all jockeying to see who can shave the most delay off of their shipping options. Recently, eBay and WalMart both began testing same-day delivery in parts of the country. The competition to eliminate just a few extra shipping hours is intense; to get deliveries to customers in under an hour, eBay dispatches college students by foot, bike and taxi to pick up products at local big-box stores and bring them to people’s doorsteps.
Faster shipping is costly. As a share of Amazon’s total sales, the amount of money that went to shipping came to nearly 5 percent in 2011, up from just 3.2 percent in 2009. Shipping is increasingly eating into Amazon’s profits, and the move to same-day delivery promises to exacerbate that trend.
Amazon is moving ahead anyway. By bundling same-day delivery with Amazon Prime — whose members spend up to twice as much as non-members, according to some estimates — the company is likely to make up for any shipping-related shortfalls. It’s hard to see a mom-and-pop store pulling off a feat like this; only a company as large and coordinated as Amazon has the means to use same-day shipping as a loss-leader.
But same-day shipping doesn’t solve everything. It raises the pressure on Amazon to have an even more reliable inventory than it does now, lest an order come in and can’t be fulfilled within 24 hours.
(Rick Wilking/Reuters)
Faster shipping has also played an important role behind the scenes, allowing companies to produce a wider variety of products with less unsold inventory. When air shipping first began to displace ocean freight in the mid-20th century, it cut weeks off of transportation times, enabling perishable goods to survive much longer trips. That trend has only accelerated as aircraft technology has improved, according to David Hummels, a Purdue University economist....MUCH MORE
