Tag Archives: distribution

Forever Ware to Cut Take-out Waste

Take-out containers and cups account for a large percentage of trash in the U.S. And according to the Energy Department, only 5% of plastic waste in the U.S. is recycled. During Covid, even more take-out containers were needed while restaurants were closed for in-person dining. More trash.

Although we would all like to use recyclable containers for our take-out orders, most of the time we don’t have that option. We don’t mean to cause excess trash, but it happens. Perhaps the solution to that problem is to encourage restaurants and cafes to place take-out orders into reusable containers that can be returned and used again, and again, and again.

This is the basis of Forever Wear – to provide recyclable containers to businesses for them to use with their customers. The restaurant is the point of contact and offers the containers to customers for a fully refundable deposit.

It works like this – restaurants and cafes pay a monthly fee to license Forever Ware software that in turn, allows the restaurant to checkout and track stainless steel containers and mugs. Customers pay a refundable fee to use containers that can be returned to the store, where they are then provided with clean, sanitized containers for their next order.

The restaurants benefit by saving thousands of dollars on disposable containers and decreasing landfill trash. The customer benefits from the clean healthy containers while also doing good and lowering their carbon footprint. 

Sign up and do some good for the environment!

Group Activities and Discussion Questions:

  1. Poll students: How much do they think their takeout food containers contribute to a trash problem?
  2. How would use a different system if it reduced waste?
  3. Show Forever Wear website: https://foreverware.org/
  4. Videos are available at: https://www.youtube.com/@foreverware9208
  5. Discuss organizational buying compared to consumer buying.
  6. Divide students into teams.
  7. Have half of the teams develop a marketing program directed at getting restaurants to sign up for Forever Wear.
  8. Have half of the teams develop a promotional campaign to convince customers to use the containers.
  9. Debrief the exercise.

Source:  Williams, N. (9 November 2022). Putting a lid on takeout waste. Minneapolis Star Tribune.

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The Bullwhip Effect Impact on Inventory

The bullwhip effect is in fine form these days. What is the bullwhip effect? In short, the bullwhip effect is when small changes in demand at the retail level can cause large changes in demand at the wholesale, distributor, and manufacturer levels. Think of how a bullwhip whistles through the air… The small motion of the whip base causes a big crack at the end of the whip, putting everything in disarray.

The result can either too much inventory (excess product) or too little inventory (unfulfilled need). Ideally, retailers want to have enough inventory to fill demand, but not too much waste storing extra inventory. It’s a fine balance. And of course, the balance was upset by the COVID pandemic when the supply chain was significantly disrupted globally. (Remember all those empty shelves for toilet paper?)

Retail spending for some categories trended upwards during the pandemic when (1) customers demanded more inventory, so (2) retailers ordered more product, followed by (3) wholesalers ordering more from (4) manufacturers, who in turn ordered more from (5) suppliers to meet demand. The cycle was exacerbated into a larger swing in orders. Excess inventory tends to be discounted so that the shelves clear. And then the cycle start again….

Bullwhips are tough to manage. It takes coordination throughout the supply chain to maintain balance. Technology can help, but it takes a continual evaluation of on-hand inventory, order timing, and pricing.

Go ahead, crack the whip and see what happens.

Group Activities and Discussion Questions:

  1. Poll students: What categories of items have been in short supply? What categories have more inventory than needed?
  2. Show video from WSJ: https://www.wsj.com/video/series/wsj-explains/why-everything-is-on-sale-the-bullwhip-effect/86086359-41FE-440C-9E66-A106E6D045A6
  3. How can the bullwhip effect be minimized?
  4. What should be done at each step of the supply chain?
  5. Is there a long-term effect?

Sources:  Wall Street Journal (5 October 2022). Why everything is on sale: The bullwhip effect. Video.

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Peloton Now Available on Amazon

Like many other direct-to-consumer companies, Peloton did great during the pandemic. Its sales were at an all-time high and the company couldn’t keep up with demand. Peloton sold only through its own retail stores and online – no other distribution channel. This model allowed Peloton to keep a larger portion of the sales price, but the narrow distribution hampered sales and delivery. It just couldn’t keep up with demand.

But now things have changed in retail, and changed for Peloton in particular. In a move designed to expand its customer base and sell more product, its fitness equipment and apparel will now be available from Amazon. This is the first such partnership for Peloton’s distribution channel.

The Peloton bike retails for $1,445 – a pretty large sum for a product on Amazon. Also on Amazon, Peloton will sell its strength product, the Peloton Guide, for $295 plus branded cycling shorts, weights, yoga blocks, and other apparel. (At this time, the more expensive Bike+ and Tread treadmill are not available on Amazon.) Bike customers can now select a self-assembly option instead of having Peloton staff assemble and install the Bike.

Peloton is not the only company expanding its sales from DTC to brick-and-mortar stores. Consider Warby Parker and Allbirds; both companies started by selling products online only, but have now expanded to their own stores and other retailers.

Where will you purchase?

Group Activities and Discussion Questions:

  1. In order to be successful, companies must be able to physically get a product into the hands of the customers. Discuss how a distribution channel works.
  2. For Peloton Bike, what distribution channels are used now?
  3. How can the channel be expanded? What approach could be used?
  4. Divide students into teams. Have each team draw a flow chart for the distribution of the product.
  5. View Peloton’s store on Amazon: https://www.amazon.com/stores/Peloton/page/08F7A78F-F893-478F-975C-27223FD08B5F?ref_=ast_bln&pd_rd_w=W3EIN&content-id=amzn1.sym.73ac3f51-c1c2-4951-89eb-8ee3c7bb7bd8&pf_rd_p=73ac3f51-c1c2-4951-89eb-8ee3c7bb7bd8&pf_rd_r=3E7328ME1FKNQGD6VTW8&pd_rd_wg=vNHwA&pd_rd_r=b66f4f9e-6c64-45f2-b2b7-29299228d75c
  6. View video: https://youtu.be/J1pKZts_K3s
  7. View Peloton’s website: https://www.onepeloton.com/

Sources:  Ovide, S. (25 August 2022). Why Peloton is selling on Amazon. New York Times.; Thomas, L. (24 August 2022). Peloton strikes a deal to sell fitness equipment and apparel on Amazon.

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