Thursday, July 05, 2007

Alternate Distribution Systems

If you're like me, you probably assume that the system that gets a consumer good from point of manufacture to point of sale is logical, understandable, and reliable. When it comes to the big national retailers (Wal-Mart, Target, K-Mart, many car companies, etc.), that assumption mostly holds true. Companies that are large enough to span the country (if not the world) have the resources necessary to construct unified supply chains. Using reliable database backends, these national supply chains ensure that trains, plains, and trucks (er, automobiles!) get shipments of goods from point A to point B.

When you change your focus to look at regional, and even local, supply chains, the notion that the physical transportation of goods is logical breaks down quickly. At this level, there is far less automation, and far more manual intervention. There are plenty of people whose jobs require them to monitor regional supply chains, fill out orders, and follow up with delivery systems to ensure that those orders make it to their respective destinations.

I've been amazed to discover that for very small business operations, there is actually a workable supply-chain / distribution model that is low-cost and can get goods shipped within a 200-mile radius. I recently signed up with a CSA (that's Community-Supported Agriculture), which is basically a membership with a local farm (well, Wisconsin isn't that far!). Every week I get a box of whatever has come into season at the moment.

So how do I get my box? Do I drive to Wisconsin? Nope! Does the farm ship boxes to every possible grocery store in the Twin Cities? Nope--it's not nearly big enough.

Instead, there are volunteer farm subscribers who agree to let the farm use their land (usually their garage, in fact) as a distribution node. Every Thursday, I drive to a residential location in St. Paul, pull into the back yard, and take a box of vegetables. That's it--quite a system. It's totally bizarre and runs against all your traditional notions of how you should pick up retail goods. There's no storekeeper to make sure you show up and that you only take your one allotted box. Instead, it's an honor system--you pays your money, you gets your veggies. It's great--a medium-sized farm can effectively distribute over a fairly large region without investing heavily in traditional supply-chain technology.


Anonymous Bonnie Erickson said...

Steve, Is your CSA organic? The entire CSA system fascinates me as I grew and preserved most of our family's vegetable supply until my children were out of school. I don't think CSA's were available then. I did some pick-your-own for berries and had friends with apple trees, but the CSA's were scarce if present at all.

11:14 PM  

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