Each Monday Morning from The Supply Chain Television Channel
March 4, 2013
This Week's Video Supply Chain News
for March 4, 2013
Is a Breakthrough Coming in Truck Crossing of Mexican Border? Walmart US Chief Says it is Losing the Shelf Stocking Wars; LTL Carrier Q4 Results and Trends; Plus the Supply Chain Week in Numbers
CSCMP Quick Courses
Topics include demand management, financial and inventory fundamentals, materials requirements planning, physical distribution systems, and sales and operations planning, and more
This Week's Newscast Made Possible By:
Oct. 3, 2008
There are valid reasons for both the DC and DSD distribution models, but neither should determine the store assortment, which depends on the consumer.
The Distribution Center model makes sense when you have many prepackaged products which are continuously replenished and require little in-store servicing. With the facility justified, you can also add seasonal and holiday 'in and out' products which can share the distribution network.
The key is to manage the time supply of inventory in the warehouse and distribute it efficiently.
The Direct Store Delivery model can be implemented purely as a distribution method or also allow the manufacturer to manage some of the in-store merchandizing.
I do not see any advantage of using DSD simply to deliver merchandise. Although it may help the 'mom and pops' that are on the same route as a large retailer, the DSD model must be more expensive. Once the big drops are removed, it will become more costly to reach the independent retailers but the larger retailer must benefit.
If DSD is used to support in-store merchandising, then you have a different story. The manufacturer's representative can give their products the individual attention that increases their sales. The bad thing is that they can also load up the store with inventory if no one is watching.