Direct-Store Delivery (DSD) is the subject of a major new report from the Grocery Manufactures Association (GMA) scheduled to be published in the spring.
It will focus on how retailers can work with their trading partners to improve the top line via cost savings and sales growth while improving the shopping experience.
Publication of this report comes at a good time. Retailers and manufacturers are looking for ways to improve the efficiency of procedures that have suppliers delivering product directly to the store. A smooth check-in operation is what all trading partners are looking for. While this has always been the case, intense retail competition today has made flawless DSD procedures more important than ever.
Also fueling this need are the products involved. Many of the top-selling consumer packaged goods sold in grocery stores in 2007 were delivered directly to the store. According to The Nielsen Co., carbonated soft drinks top the list at $17.6 billion in retail sales, followed by refrigerated milk, fresh bread, still/non-carbonated bottled water and light beer.
The good news is that improvements in direct-store-delivery procedures have been steady over the years.
"We are definitely more efficient than we were five years ago," reports Pam Stegeman, vice president of supply chain and technology at GMA, Washington.
"We have better use of technology. What we are seeing is a good increase in retailers wanting to work with DSD manufacturers to improve how things can be done to have better efficiency and be able to meet consumer needs better. And we're starting to really be able to trust each other more as trading partners."
Stegeman lists such DSD improvements as flexible receiving, automated check-in, price and data synchronization.
Coca-Cola Relies On ASNs
The Coca-Cola Co., a leading supplier of DSD products to supermarkets, has invested in DSD technology and procedures over the years. Indeed, the beverage giant has made several advances in all areas of operations, including account management, delivery and merchandising.
"Process standardization and technology advances have been key drivers of our advances in DSD," says Ann Dozier, vice president, strategic industry initiatives at Coca-Cola. "We have been focused on standardizing processes in our warehouses, in our delivery process, and at the shelf.
"We are utilizing technology to enable this process standardization and measure performance. Improved collaboration with our retail partners has also provided improvements in DSD. This includes better connecting our information through initiatives like data synchronization, leveraging retailer data to improve shopper insights that lead to ensuring the perfect assortment and space allocation at the store, and automating our delivery processes."
Coca Cola began deploying an Advanced Shipment Notice (ASN) about five years ago. The process allows the company to scan a single barcode (SSCC—a GS1 standard)) at the point of check-in to receive the entire shipment. The details of that shipment are sent to the retailer's system prior to delivery. So when they scan the single bar code, it receives the entire shipment. On an ad hoc basis, they do random audits to ensure accuracy.
"The advance ship notice has offered the ability to leverage barcodes to check in the entire shipment with one scan of a barcode vs. having to go through and count every item and manually match up our delivery ticket to the retailer's receipt ticket," says Dozier. "The ASN has been a tremendous driver of efficiency in the delivery process because it expedites check-in."
Wider adoption of this procedure has occurred over the past two to three years as retailers become more sophisticated with their backdoor procedures and technology capabilities.
Coke aims to roll out this procedure to other retailers this year.
"It's something that we promote with the entire DSD community," says Dozier who chairs the DSD Committee of GMA. "If all DSD companies have this capability, it speeds up the entire backdoor receiving process."