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THE PROBLEM
Blue Apron was recovering from significant rapid growth, quickly followed by a period of protracted customer and revenue contraction. This created a resource-constrained situation that limited the company's ability to invest in automation within their existing fulfillment centers, yet they had a mandate to reduce operational costs and find a path to profitable order fulfillment.
The largest and highest-volume fulfillment center, a 1M ft², FDA-regulated facility, became the focal point for immediate cost reduction.
KEY QUESTIONS
- How can the cost per order be reduced as quickly as possible?
- How can additional operating costs be avoided as increased menu choice is provided to customers?
- How can change be implemented?
THE SOLUTION
Maveneer was asked to lead a comprehensive review of the operation and develop a design to address the problem. The Maveneer Advanced Analytical Suite, MaaSTM, was used to analyze operational and production data, perform discrete event simulations, and lay a quantitative foundation for evaluating process alternatives and technology opportunities.
Modeling results and design hypotheses were calibrated, verified, and operationally piloted. This comprehensive approach increased confidence in the analytical results while also allowing for operational feedback from workers and the management team to ensure that design conclusions and final recommendations were feasible, implementable, and met the company’s objectives.
KEY RESULTS & INSIGHTS
- Short-term cost reductions with zero capital expenditure were achieved through numerous process changes implemented with Maveneer’s guidance.
- Approximately 24% of the total cost per order identified as the largest opportunity to reduce food waste through inventory control and process discipline.
- 15% increase in individual productivity achieved by eliminating fixed fulfillment zones and implementing dynamic zoning; required zero capital investment.
- Investment in pick-to-light automation necessary to manage increased fulfillment costs associated with expanded menu choices. The recommended design and supporting business case were provided for future consideration.
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