WASHINGTON, D.C. – Less than 60 percent of manufacturer’s sales representatives (MSRs) of the major direct store delivery (DSD) suppliers have access to store specific retailer plan-o-grams, according to Optimizing the Value of Fully Integrated DSD, a report from the Grocery Manufacturers Associations (GMA) DSD Committee and Willard Bishop.
The purpose of the report is to examine ways trading partners can fully integrate their DSD systems to increase in-stocks and sales. A fully integrated DSD system gets its additional power by combining four key elements of the supply chain: ordering, warehousing and delivery, merchandising and coordinating. In an integrated model, the MSRs are aligned with the retailers’ store management to be a coordinated team that efficiently executes the retailers’ merchandising.
Participating retailers included Cub Foods, Hannaford Bros., The Kroger Co., Safeway Inc., SaveMart Supermarkets, Wegmans Food Markets and Winn-Dixie Stores. The data captured in the study is based on shelf analysis, market observations, surveys of MSRs, and senior executive interviews collected in cooperation with participating retailers from a total of 28 stores. Key findings include:
Challenges in managing plan-o-grams are an important reason why shelf conditions don’t always deliver the optimum shopping experience.
The in-stock level for DSD averaged 98.2 percent, versus the 94.0 percent found in a study of DSD and warehouse delivered products.
The incidents of “under facings”, how often the shelf was not carrying the required days of supply, which is an indicator of the likelihood of out-of-stocks, in this study average 13.1 percent.
There are significant differences in retailer adoption of DSD practices, which creates untapped potential for improving performance.
The report provides best practices for enhanced shelf performance and revealed five questions that are key to the management of the plan-o-grams. Every retailer interested in making sure that shelf conditions reflect their authorized plan-o- grams will want to ask each of these questions, for both DSD and warehouse products, to see if current practices are delivering the intended results.
“When a fully integrated DSD system is operating seamlessly, shoppers find the products they are looking for every time they shop and retailer resources are engaged only with receiving and checkout. Taking advantage of these efficiencies can free up nearly 17,000 hours of labor per year in a typical large format store,” said Jeanne Iglesias, GMA senior director of industry affairs and collaboration.
About the Grocery Manufacturers Association
Based in Washington, D.C., the Grocery Manufacturers Association is the voice of more than 300 leading food, beverage and consumer product companies that sustain and enhance the quality of life for hundreds of millions of people in the United States and around the globe.
Founded in 1908, GMA is an active, vocal advocate for its member companies and a trusted source of information about the industry and the products consumers rely on and enjoy every day. The association and its member companies are committed to meeting the needs of consumers through product innovation, responsible business practices and effective public policy solutions developed through a genuine partnership with policymakers and other stakeholders.
In keeping with its founding principles, GMA helps its members produce safe products through a strong and ongoing commitment to scientific research, testing and evaluation and to providing consumers with the products, tools and information they need to achieve a healthy diet and an active lifestyle.
The food, beverage and consumer packaged goods industry in the United States generates sales of $2.1 trillion annually, employs 14 million workers and contributes $1 trillion in added value to the economy every year. For more information, visit the GMA Web site at www.gmaonline.org.
About Willard Bishop
Established in 1976, Willard Bishopis recognized within the grocery industry as food retail experts and thought leaders. Willard Bishop’s long-term relationships with and knowledge of premier retailers allows the company to create a unique set of value-added products and services for its clients. Willard Bishop is a nationally renowned provider of business intelligence consulting solutions, tools and processes, and information products that help retailer and CPG supplier clients solve business problems and drive profitable growth.