Chapter 16 addresses the need for logistics managers to anticipate and adapt to change. Here is one example of technology causing a massive change in logistics. But first, let’s step back a few years. About 25 years ago, in 1994, Jeff Bezos revolutionized the book-selling industry when he founded Amazon, as an online bookstore. Bezos used the Internet to revolutionize how consumers shop for books. A few years ago, Amazon used another technology, print-on-demand, to revolutionize the logistics of bookselling.
Before print-on-demand, a bookseller — whether it was Amazon, or a traditional bookstore, or book publishing house — maintained a very expensive logistics organization including several large warehouses (see below).
Think about the logistical challenges involved. About 5,000 new book titles are published every day. Someone must estimate how many copies of each title are likely to be ordered, order those books from the printer, deliver them to a warehouse or warehouses, store them until ordered, then ship them to the customer if they are ordered. Think about the variability in demand and the consequences of ordering too few or too many copies. Think about the money tied up in buying, transporting, and storing the books.
About ten years ago Amazon recognized that the new print-on-demand technology could potentially eliminate most of those costs and risks, enabling Amazon to provide excellent service at a lower price. The book you order today from Amazon exists in their inventory, not as a physical book, but as a pdf. When your order is placed online, it gets sent to the nearest Print-on-Demand laser printer (see example below) that automatically prints and stacks the pages, trims them into a book block, them unites them with a newly printed cover. Within five to twenty minutes, depending on the number of pages, the cover is glued to the book block and the resulting book is shipped to you.
Now think about the change in logistics. The memory module contains millions of digitized books waiting to be printed. There is no need to estimate how many copies of each book will be ordered. There is no need to order copies from the publisher, then print, ship, and store them. There is no cost for shipping and storage. Warehouses are replaced with small rooms. There is no loss of sales because of shortage and there is no waste due to over-ordering. The print shop only needs to order blank paper, ink, and glue, not a specific number of copies of each book title. Cost is slashed. Risk and uncertainty are eliminated. Profits increase and prices can decrease. Customers are better served because Amazon is never “out-of-stock”.
In less than ten years print-on-demand technology has completely revolutionized the book-selling industry by completely restructuring its logistics concept.
Answer the following questions:
Describe (50 – 75 words) a new technology or innovation that you have recently learned about. You may choose to provide an Internet link to a web site describing this technology.
Describe (50 – 75 words) an organization/business and industry that you believe will be, or is being, dramatically affected by this new technology or innovation.
Keeping in mind the key topics from this course, explain how you imagine the organization/business and industry will be, or is being, affected.
Remember that this is a logistics course so your response should demonstrate that you understand how the new technology or innovation may, or may not, affect logistics in this industry and organization/business. Your objective is to demonstrate that you recall, understand, and can appropriately apply relevant course material. The bettcixer you do that the better your grade.
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