CPGMatters: Coca-Cola Enhances DSD with Better Collaboration
By John Karolefski
Through a special arrangement, what follows is an excerpt of a current article from the monthly e-zine, CPGmatters, presented here for discussion.
The Coca-Cola Company aims to make the check-in process of direct store delivery (DSD) more efficient in 2008 as part of a broader goal of improving its supply chain activities in collaboration with retailers.
Plans call for rolling out Advanced Shipment Notices (ASNs) to more retailers, sharing data and insights to schedule deliveries based on shopper demand, and aligning peak delivery times with merchandising to add value for the shopper.
“Having the most efficient and effective DSD processes supports sales growth through ensuring the right assortment of products in the store and ensuring the highest level of in-stocks,” said Ann Dozier, vice president, Strategic Industry Initiatives at Coca-Cola. “It also allows us to focus with our retail partner on growing sales and not dealing with inefficiencies and problems.”
In recent years, Coca-Cola has made several advances in DSD in all areas of its operations including account management, delivery, and merchandising. They typically involve process standardization and better technology. She listed the following:
- Standardizing processes in warehouses, in the delivery process, and at
the shelf. Coke has enabled its warehouses with technology that ensures the
delivery of what was ordered and reduces inaccuracies in picking the product.
- Improving collaboration with retail partners, including connecting information
better 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 the delivery processes.
“We are using that information to align our deliveries based on shopper demand,” she explained. “For example, if the peak time at a store is Saturday morning, we are aligning our delivery to occur as close to that peak time as possible. This ensures we have the minimum amount of inventory in the backroom.”
“Off-hour delivery is another strategy that allows us to better align with shopper demand. It also reduces the wait times at the back door and promotes an efficient back door and back room,” Ms. Dozier said.
The Grocery Manufacturers Association (GMA) plans to release a study on DSD this spring. Notable improvements in recent years include flexible receiving, automated check-in, price and data synchronization.
“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,” reported Pam Stegeman, vice president of supply chain and technology at the GMA. “And we’re starting to really be able to trust each other more as trading partners.”
Discussion Questions: What do you think of Coca Cola’s and others’ efforts to speed up the entire back-door receiving process? What do you think of its potential to align deliveries based on shopper demand? What needs to be done to make the back-door delivery process smoother for retailers and vendors?