Ready For Re-D?

Often times, businesses eliminate the middleman to save costs. But in the case of redistribution, the middleman can actually save businesses money.


Additionally, all parties benefit from the single point of contact and communications that the redistributor provides. They also reap benefits of increased data transparency. The franchisor can make one call or check online any time on inventory levels, open purchase and sales orders, and distributor purchase history. The transparency and convenience of this data being in one place also makes brand compliance and preparing contingency plans easier.

And while the franchisor benefits from better communication and reduced costs, a good redistributor can solve one of the franchisor’s most vexing problems: getting the right product at the right time into each franchisees’ distributor by working closely with the suppliers to ensure proper and timely delivery of key items, particularly sensitive seasonal or promotional items.

Suppliers, much like franchisors, also benefit from the cost savings and buying power that redistributors provide. Because the redistributor thoroughly manages the details and is in constant communication with suppliers, suppliers can better schedule production, thereby decreasing their manufacturing cost. Additional cost savings come from shipping to one location instead of many. Finally, administrative costs also are reduced, since only one invoice is generated.

The existing distributor network benefits as well. The redistributors can provide improved communications on inventory, orders and promotional information. Functioning as a consolidation warehouse, the redistributor allows distributors to react to change requests more quickly and efficiently, reducing their own inventory and increasing inventory turns. The distributor also will experience reduced administrative costs by processing a single order, paying a single invoice and receiving a single truck.

By consolidating slower moving and promotional items, enhancing communication and reducing costs at key points in the supply chain, redistributors are an asset for franchisors, suppliers and distributors alike. So if your sales are sluggish and your profits are squeezed, redistribution may be the right medicine, right now, to increase efficiency and reduce costs in your supply chain. d

Varga is vice president, business development, for Consolidated Distribution Corp. LLC (CDC), a Lemont, IL-based foodservice supply chain company serving the quick-serve and casual-dining restaurant industry.

5 Reasons For Re-D

  1. Significant savings on LTL loads of certain items;
  2. More transparency, less hidden costs in supply chain;
  3. Optimized inventory levels throughout system;
  4. More reliable, on-time delivery;
  5. A diligent partner to help meet cost-saving objectives.

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