As Dunkin' Brands expands to the West, Setter hopes to take on additional business. "We hope they let us be part of that expansion as they set up their distribution network. Although we're only operating one shift each day, our warehouse is set up to operate 24 hours a day, so we could certainly handle the increased business, and Ryder could help us facilitate that."
To generate additional revenue, the MADC developed a separate truckload division. "The division allows us to handle close to 80 percent of our own backhauls," says Setter. "We'll take another company's product to a destination, pick our own product up and bring the product back. We control 80 percent to 90 percent of our inbounds ourselves." Another revenue stream is going to come from the facility's freezer. "We have a huge freezer and we want to get into third-party refrigerated warehousing," says Setter. "With the new WMS, we will be able to segregate the space and manage it as a separate inventory."
Right now, the MADC delivers to its members once a week, but will soon double that, according to Setter. "We want to be able to make two deliveries a week to every shop that wants it. That's a monumental task in just setting up the orders here and figuring out the routing. If you're delivering to a shop once a week, you know they're going to take a delivery, but if it's twice a week--and they have a light week-they may not take another delivery.
"That means we're going to have to continuously modify the routes and still hit the time frames that we've established with the other members so that they get their delivery when they're supposed to get it."
It all boils down to customer service. "It's going to take some time to change the mindset of our employees," says Setter. "Like our customer service reps, our drivers will also play a new role. They're just drivers now, but they're going to have to become salesmen."
But with its new facility, technology-and most of all-it's new, customer-focused attitude, the MADC is off to a great start.
Now, That's A Lot Of Joe
When the first Dunkin' Donuts shop opened in Quincy, MA, in 1950, founder Bill Rosenberg couldn't have imagined that, by the turn of the century, thousands of Dunkin' Donuts franchisees would be serving 2.7 million cups of coffee a day.
Today, Dunkin' Donuts is the number one retailer of coffee by-the-cup in America. There are more than 4,400 Dunkin' Donuts locations across 36 states, the majority of which are located in the Mid Atlantic and Northeast. In fact, 80 percent of its sales come from just 35 percent of the United States, but not for much longer.
Dunkin' Donuts is looking to expand to the Midwest and South and has entered four new markets--Cleveland; Charlotte, NC; Tampa, FL; and Cincinnati. The company plans to open up more than 500 stores this year, taking on its two rivals, Starbucks Corp. and Krispy Creme, which have a much tighter stronghold on the West and South.
While both competitors have posted double-digit growth over the past couple of years, Dunkin Donuts has done pretty well itself. Sales increased last year by 10 percent-not too shabby for a 55-year old brand.
That's because Dunkin' Donuts is creating a new recipe for success. First, it expanded its menu beyond doughnuts to include bagels, low-fat muffins and breakfast sandwiches. Next, it launched the Coolatta to compete with Starbuck's Frappuccino, and added flavored coffees at lower price points than its competitors.
Most recently, Dunkin' Donuts has added lattes, cappuccinos and espressos to its mix. Anything its competitors can do, Dunkin' Donuts thinks it can do better-and cheaper.