Holiday e-commerce: Innovation Required

This is an excerpt of the original article. It was written for the July-August 2014 edition of Supply Chain Management Review. The full article is available to current subscribers.

July-August 2014

LEGACY Supply Chain Services has made company culture the centerpiece of how it drives innovation, efficiency, and the creation of value for its customers. Is it a model that others should replicate?

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I admire UPS and FedEx for their parcel shipment innovations. They have clearly been two of our supply chain heroes; leaders in creating today’s impressive, renowned, and efficient parcel delivery industry. This industry has been a major player in enabling the e-commerce business to grow efficiently and rapidly over the past two decades.

Given the past Christmas season’s shipment delays, how did they (ironically) get positioned to become among the “Grinches That Stole Christmas” to parents and children that received gifts after Christmas Day—an unforgiveable sin in their eyes? Parents couldn’t blame themselves for being the last-minute shoppers they’ve always been when shopping at brick-and-mortar retail stores. When the last-minute shopper shopped at a store they could only blame themselves if the gift they wanted to buy was not on the shelf. In contrast, however, when they see a picture of the product on an Internet site, and the site says it’s available and can be delivered on time, if it’s then delivered late they blame the parcel carrier. 

In the weeks following Christmas, pundits speculated as to the factors that led to the fiasco. These included: e-commerce orders that exceeded forecasts; an extended period of bad weather; too many last-minute shoppers; late-discounting by retailers to gin up business; a shortened holiday shopping season; the shifting of orders to air from ground due to retailer delays in processing orders; parcel carrier capacities that were exceeded; the insufficient supply of planes on the day before Christmas Eve; and lastly the parcel carriers’ executive leadership.

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