Why do You Need to Optimize Your Business for Direct Store Delivery?
- April 10, 2022
The retail industry has become increasingly competitive in recent years. As a result, more
businesses adopt omnichannel selling tactics as client demands speed and convenience
grow by the day.
What is Direct Store Delivery (DSD)?
Direct Store Delivery (DSD) is a retail distribution model in which merchandise is delivered
directly to retail outlets rather than sent to warehouses or distribution centers.
Direct Store Delivery is becoming more popular among businesses that provide pharmacy
drugs, fresh foods, edible consumer goods like baked goods, snacks, soft drinks and
beverages, organic farm produce, and locally produced alcohol, among other things.
Going directly to retail outlets – or even the end customer in some situations – allows
businesses to save time and money on wholesale distribution and secondary warehouse
What’s the Difference Between Direct Store Delivery and Centralized Distribution?
The supplier or manufacturer sends finished goods to a primary warehouse under a
centralized distribution system. When the demand arises, it is delivered from this core facility
to numerous distribution facilities within cities or straight to retail shops—a store manager
phones the warehouse to place an order, which is usually done regularly. To replenish
stocks, the ordered quantity is sent from the warehouse or distribution center to the store.
The retailer is solely responsible for inventory management under this approach.
On the other hand, in the case of a Direct Store Delivery, inventory management, and
shipment load are handled by the manufacturer or supplier.
Why is it essential to optimize Direct
The demand for direct store delivery services is growing as a result of:
● Broader, more rapidly changing, and expanding assortments
● Delivery times are shorter
● Variability in demand due to an increase in the number of promotions
These advancements significantly impact the volume of goods to be shipped and the
distribution options available. To remain competitive, quality service, reliability, transparency,
and efficiency are essential. Furthermore, due to increased labor expenses, transportation
congestion, and rules and limits, the costs of direct store delivery are rising, particularly for
city distribution. As a result, shippers and retailers want to fine-tune availability, delivery
schedules, and margins more and more.
How can Direct Store Delivery be
made more efficient?
Businesses can implement load building and route optimization on a strategic, tactical, and
operational level to improve Direct Store Delivery. The following are the primary
enhancements that lead to cost savings and improved performance:
● Making the transition from static to dynamic planning
● Planning shifts from decentralized to centralized
● Transparency and visibility are created so that the receiver and carrier can optimize
their respective parts of the supply chain.
● Adding efficient load building optimizes the usage of truck space and
What are the outcomes of Direct Store
The following are the primary outcomes of optimized Direct Store Delivery:
● Savings of up to 15% on transportation costs
● CO2 emissions are reduced as a result of fewer kilometers/miles driven.
● Customers are happier as a result of better on-time service performance.
● Delivering a reasonable amount of work to perform increases team member
● Hardware footprint is reduced, mainly when cloud solutions are used.
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