Fresh Direct Essay

I. Statement and description of central issue (1 page; 2 minutes) II. Identification/description of alternatives (2 pages; 4 minutes) III. Rationale for selection of best alternative (3 pages; 6 minutes) IV. Description of implementation plan (1 page; 2 minutes) V. Conclusion (1/2 page; 1 minute)

Statement/description of central issue

• Clearly states issue to be responded to with recommendations • Explains underlying tension to justify why this is an issue • Cites case facts as evidence to clarify why uncertainty requires attention Identification/description of alternatives

• Presents viable possible solutions to central issue

• Explains how each proposed alternative will address/resolve central issue Rationale for selection of best alternative

• Explains pros/cons of each alternative

• Explains why chosen alternative is preferred to others despite limitations Analysis

• Uses facts and data from case appropriately

• Uses appropriate techniques and frameworks

December 10, 2012

Group 12H

Kaizer Budhwani

Chanwoo Lee

“Our food is fresh, our customers are spoiled. Order on the web today and get next-day delivery of the best food at the best price, exactly the way you want it, with 100 percent satisfaction guaranteed.”

Section. I – Statement and description of central issue

FreshDirect was launched in July 2001 and it offers over 5,000 perishable products and 3,000 packaged goods through online shopping and delivery

service to more than 300 zip codes in New York City, Long Island, New Jersey, and Connecticut.

The central issue for FreshDirect which came as the online grocery retailing business continued to mature is environmental concerns. First, because of the conveyor packing system at the central processing facility in Long Island, FreshDirect is forced to use lots of cardboard boxes to deliver the groceries. Produce came in on box, dry goods in another, and a single tube of toothpaste in its separate cardboard delivery container. Although FreshDirect had transitioned to the use of 100 percent postconsumer recycled paper, the reusability of the cardboard boxes is limited. There is no system of returning them to FreshDirect to be recycled.

Second, the additional exhaust fumes that FreshDirect trucks contribute to the urban atmosphere is an environmental issue. As the company relies on the central processing facility in order to avoid expensive rent for a retail space, the company uses its owned refrigerated trucks which can hold 500 orders to deliver the goods to their customer’s doorsteps and office parking lots. When the minimum order is $30 and the company’s revenue is $250 million, anyone can guess how many trucks have been operated and produced exhaust fumes.

Third, FreshDirect trucks double parked in busy city streets had only made the traffic congestion problems worse. The trucks park in city streets in order to deliver goods to each customer’s doorsteps and it takes substantial amount of time. Section. II – Identification and description of alternatives

In order to reduce the amount of cardboard boxes usage, FreshDirect can promote recycle system. Every time when customers finish orders, the company emphasizes on the after-order page that if the customer returns the cardboard boxes, FreshDirect will give credits to the customer for the next purchase discount. This promotion will increase customers’ awareness of recyclability of the cardboard boxes and encourage them to return the boxes to a delivery agent.

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Another alternative to the cardboard boxes usage is to use the current SAP manufacturing software system to reduce the cardboard boxes usage. Instead of putting almost everything separately, develop a software system that will figure out the minimum number of cardboard boxes used to pack an order. This will reduce the cardboard boxes usage in the first place.

In order to reduce the additional exhaust fumes that FreshDirect trucks contribute to the urban atmosphere, FreshDirect will use electric trucks and hybrid trucks that will consume less or no gas at all. With the recent electric and hybrid car movement, FreshDirect could get fund from government which will help the company to buy trucks needed.

Another alternative to the additional exhaust fumes is the company to build partnerships with local retail stores to hold onto FreshDirect customers’ packaged goods. FreshDirect will pay handsome money to local retailers and customers will pay less on delivery charges due to the customers themselves picking up the goods at the local retailers. FreshDirect will operate fewer routes and produce less exhaust fumes since the delivery agent will drop off packaged goods in one place.

In order to solve the traffic congestion problems, FreshDirect will also apply the system of partnering with local retailers. Instead of the delivery truck parked on a city street and delivers the goods to each customer’s houses, if the delivery is made at one place, the truck will save some time on delivery and it will reduce traffic congestion.

One alternative is instead of hiring just a delivery person at a minimum wage, hire experience delivery person and train them with high quality training program in order to achieve faster and efficient delivery process. The delivery time reduction will reduce traffic congestion.

Another alternative is to build a partnership with existing delivery service companies such as FedEx or UPS. This partnership will reduce the number of FreshDirect trucks running. If the goods don’t required refrigerating, then another delivery service company can deliver them and reduce traffic congestions.

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