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Direct store delivery (DSD) is a form of inventory management system in which products are shipped directly to stores by the manufacturer for sale in those locations. This is in contrast to the models that use a warehouse for a retail company, so that the products are shipped by a manufacturer.
A direct store delivery effectively eliminates “middle man” and allows products to reach customers more quickly.
How Companies can use direct store delivery (DSD)?
There are a number of ways in which a company can use a direct store delivery system to receive products from a manufacturer. In general, however, inventory systems are used by a retail company to track products on the shelf or in excess at their own sale points.
A direct store delivery system may also require the intervention of a store employee, usually an administrator for maintaining a store inventory.
Daily inventory account or reports are used to determine when new inventory must be purchased and then send an order to the manufacturer.
Large companies can also have these inventory requests remotely, handled by employees who monitor inventory through computer systems, and then place orders for products. In the end, however, the products are shipped directly to the store, rather than through an intermediate warehouse.
Advantages of Direct Store Delivery (DSD)
The use of direct delivery from the store, instead of warehouses, has some possible advantages. By eliminating the warehouse in the inventory replenishment process, stores can receive products more quickly and companies may require fewer employees to perform the same task.
Dealing with manufacturers directly at the store level, however, can be tricky, and when problems arise with damaged or incorrect inventory, it can be difficult for store associates to remedy such problems.
“6 in 10 see DSD as a key component of their company strategy going forward”
Since direct warehouse management systems are also frequently automated, there is room for errors in the discrepancies between the inventory according to the equipment account and the actual inventory in a store.
A direct store delivery system (DSD) is not something that is new to companies that have been on the market for some time, but it is a model that reduces intermediation and allows a more direct contact with the final customer.
The products today are three times as many as we had options in the 80s or 90s; currently, the sales strategy must be closer to the shelf than previous years. Knowing the behavior of customers with better detail and more quickly is a key to determine the evolution of the products of companies and, above all, has better control of the shelf where our products are and the competition.
Benefits with the Direct Store Delivery (DSD) model
Within the benefits of opting for a DSD model, we can find:
- An increase in sales due to the presence of the supplier in the stores several times a week. This fact directly impacts the time of products replacement and, therefore, in the reduction of the products shortage.
- Reduced cost by reordering and marketing the products by the store as this service is received from the vendor at minimum or no cost.
- Saves hours in the storage process and allows manufacturers to retain control of the shipping to avoid damage in transit.
- Speed Acceleration in which the information arrives from the market to decision-makers due to process cutting.
- More information about product behavior in the market (more accurate and timely).
- Direct store delivery is a perfect model if the products require a great deal of training to understand how to use them.
In short, direct store delivery (DSD) is when a company in the consumer goods industry uses a delivery method for the secondary distribution of said goods. In this case, they are delivered to the final customer without going through the retailer.