D2Ssm: Direct-to-Store Delivery
We all know that the shortest distance
between two points is a straight line.
For years, CPG supply chains have ignored this principle. Instead, supply chains were built on the
premise that filling a truck is the most important thing -- extra miles could
be managed as long as the truck was full.
The challenge is that moving in a straight line usually means that the trucks are not full. The supply chain needed to change the industry’s economic order quantity from a truckload to a case without increasing the transportation costs. But, no single manufacturer or retailer has the scale to really streamline the supply chain in a significant way.
The solution for an efficient and sustainable supply chain is to get to the principle of a straight line. The difficulty is how to turn the collection of hub-and-spoke solutions, each optimized for a single manufacturer or retailer, into a straight line from factory to store.
ES3’s D2SSM program has brought CPG supply chains into alignment by building the world’s largest grocery warehouse. It eliminates the duplicate miles of the hub-and-spoke supply chains by putting the manufacturers’ mixing centers and the retailers’ distribution centers together under the same roof. In this model, product flows from the factory to the collaborative warehouse and then directly to the store.
This supply chain innovation is ten years in the making. It required infrastructure be built to support multiple manufacturers and retailers in the same facility. ES3’s York, PA facility supports storage of 400,000 pallets, annual selection of 300 million cases, and management of more than 25,000 items. This is the scale required to ship product directly from the manufacturer’s inventory to the store.
ES3 currently ships product directly from manufacturers’ inventories to the stores everyday for two retailers. This solution saves manufacturers and retailers more than 30% of their supply chain costs and provides better service. Consumers see more product on the shelves. Manufacturers and retailers see higher sales. With ES3, everyone wins.