The Right Way To Deliver Groceries

OVERVIEW

Chapter twenty-two is titled, Managing Information and Information Technology, and the closing case, The Right Way to Deliver Groceries, is perfect for this topic. Joe Fedele, an expert in the grocery business, already has a thriving grocery store, but wanted something more. The outcome to this quandary was FreshDirect, an online grocery store that minimizes the focus of the internet aspect and emphasizes the food. The motto used by FreshDirect is, "It's all about the food." This company is different because the customers order directly from the internet, and all the products, which are stored a warehouse, are then delivered to them. The warehouse is located on Long Island, and the customers (or "depots") must be located in one of twenty-two nearby zip codes. Deliveries are made on weekends or evenings when Manhattan traffic is lighter. The only stipulations are, orders must be at least $40.00 and the delivery fee of $3.95 must be paid. Costs are kept 25 percent lower, and freshness is increased by purchasing products directly from suppliers. Products range from baked goods and deli salads to readymade-gourmet meals.

The website, www.freshdirect.com, is easy to navigate and has a large selection of products. Helpful hints, pictures, recommendations, and tables make ordering easy for those who have limited knowledge of foods and computers. Once orders are placed, they are then processed through the warehouse, which is heavily operated with the help of information technology. Machinery is hooked up to controls that can activate alarms incase of a malfunction. The entire building is hooked up to an automatic spraying system that sprays the food every night, with an antibacterial and antiseptic coating to ensure safety of the food. FreshDirect has also adapted the same barcode concept as FedEx. Customer's orders can be located within twenty feet at any time, and address information can be accessed by use of these barcodes. FreshDirect's biggest move yet, was creating recipes and having them programmed directly into the company's software. This allows FreshDirect to ensure the highest quality for of all the meals, and cut down on any unneeded labor costs.

Quality and satisfaction are high for Joe and his company, disregarding the occasional problem that any business will incur. He, Joe, has experience in this field and only wants the best for his customers. Joe sums up his views by stating, "I'm not a corporate CEO. I'm not a dot-commer. I'm just a %#&@ lunatic who knows about food."

QUESTIONS

Question number 1: "Describe the different types of information systems in use at FreshDirect. What type is each?"

FreshDirect utilizes technology to its fullest. Most of the systems in the warehouse are a combination of systems for operations and data workers, and artificial intelligence and expert systems, which help guide the company through its daily functions. The systems for operations and data workers programs ensure that the correct tasks are running at the appropriate times. Examples of these would include, the computer guided machinery and climate-controlled rooms. Most, if not all, the equipment is linked by controls in a central room which can be monitored by the workers. Artificial intelligence and expert systems, works like a person to get things done. These jobs would include the nightly spraying the food, or watching the machinery and sounding alarms in case a malfunction were to occur. The barcodes, or transaction-processing systems, are another great use of technology. The barcodes help in day-to-day operations by helping locate the customer or product information. One of the company's last major uses of technology is the internet. The website is not the most high-tech, but it has wonderful tools to guide even the most computer illiterate person through the ordering process.

Question number 2: "What advantages does FreshDirect get from its use of information technology? What are some potential problems?"

FreshDirect has many advantages with the use of technology. Using computer guided machinery, labor costs can be minimized and overall sales prices can be lowered. Using computer assisted machinery could also bring a higher level of consistency and quality to the products, which human workers might not have been able to achieve. Using the internet as their "store," costs associated with traditional "brick and mortar" stores can be reduced. Customers also have the leisure to "go shopping" at their convenience, i.e. on their work breaks, or when there are sick, which could not have been conducive to them before.

Disadvantages for this company are few, but could cause major problems for the small company. With the implementation of computer guided machinery, small problems could cost the company large amounts of money. This could occur if there was a malfunction and production was stalled for any period of time.

Question number 3: "Would FreshDirect CEO Joe Fedele agree that, for an online retailer, technology is the most important contributor to success? Why or why not? Do you think his opinion is correct? Why or why not?"

I feel that Joe Fedele would not agree that the largest contributor to an online retailer's success is technology. He stated, "I'm not a corporate CEO. I'm not a dot-commer. I'm just a %#&@ lunatic who knows about food." FreshDirect's motto clearly states, "It's all about the food." The company may be solely internet based, but they try to downplay the internet portion and focus on the food aspect of the company. Personally, I think it's a combination of both technology and personal knowledge that would really help any internet company. Even though the company may not have personal contact with its customers, one must have good business savvy and understand technology. Online retailers can have the top running software, but without good business