Volume 2, Issue 12
June 30th, 2014
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Millions of dollars can be saved by consumer goods suppliers evaluating and improving their Direct Store Delivery operations, a survey conducted by Honeywell found.
The report, which contains feedback from 350 C-level consumer goods executives and directors from across the globe, finds that 49% of organizations feel increased transportation costs have severely impacted profit margins in the past 12 months.
But those organizations that have carried out process evaluations (a/k/a process re-engineering) in the past year in their DSD processes have cut or expect to cut costs averaging $734,000 annually.
About 20% of respondents experienced or expect to experience at least $1 million a year in tangible cost-savings through DSD process re-engineering, and about 20% of companies with 3,000 or more employees anticipate saving at least $3 million.
“The report shows clearly that re-engineering DSD processes provides an opportunity for business transformation and competitive advantage,” said Brian Schulte, industry director for Direct Store Delivery for Honeywell.
“Consumer goods companies can improve their revenue while cutting costs, enabling them to strategically grow their business and margins in these challenging times,” he added.
According to the report, the top areas identified by survey respondents for cost improvement are fuel costs, merchandising, deliveries and payment procedures.
Respondents asserted that time and money also could be saved across key workflow areas. By making improvements to delivery, truck loading, delivery receiving/check-in, merchandising and order processes, the respondents said approximately 30 minutes could be saved in each of those areas per route, per day, equating to more than 2.5 hours per day for each DSD route.
The surveyed companies view DSD as a critical focus for their strategy, Honeywell said. Nearly 60% of surveyed firms said they view DSD as key to their company’s business strategy going forward.