Currently, mail-outs. This tends to be done

Currently, 95 percent of the customers are households, with the remainder
being local restaurants. Approximately 20 percent of their customer
base generates 80 percent of the profit. Theorganicgrocer.com has a financial
system—a computer application that Marcus modified to meet its needs.
A separate computer package generates advertising material and mail-outs.
This tends to be done by Maria when time permits. However, there is little
market information to support strategic operations planning. Much of Maria
and Marcus’s aspiration is based on the success of their current operations
and the hope that the trend continues. Whilst there are several competitors
supplying online vegetables, they do not offer organic products and they
have limited products. They are, however, some 20 percent cheaper than
Theorganicgrocer.com.
As business has grown, there have been complaints of damaged products,
and growth in customers has caused the average on-time deliveries
(plus or minus 20 minutes) to fall from 95 percent to 75 percent. All this,
Maria and Marcus argue, is more reason for expanding the business.
Marcus enjoys the technical aspects of the online business, and spends
much of his time modifying and improving the Web site. When necessary,
he helps to consolidate customers’ orders. “I think my time is better spent
on Web site development,” Marcus says; “It’s critical for the business if it
goes down or it isn’t showing current product information, then sales are
jeopardized.” Presently, Maria takes responsibility for placing orders to their
thirty suppliers. Maria and the delivery drivers pack customer orders into salvaged
cardboard boxes that are of various sizes and often damaged. “But at
least they are free!” she laughs.
QUESTIONS
1. What are the comparative operational differences of a conventional
“bricks and mortar” grocery to an online operation? What are the comparative
value chains for each system?
2. What are the key processes in the online operation?
3. Where are the possible operational problem areas of their online business,
now and in the future?
4. What operational improvements need to be taken now to improve
competitiveness?