Potential for Consolidated Delivery of Vendor Items to Retail Food Stores

Excerpts from the report: The objective of this study was to determine costs for the present direct store delivery system (DSD) and to project costs for delivery of DSD items from a consolidated distribution warehouse. To achieve the objective, two supermarkets were selected to cooperate in the study. Each market was surveyed for 1 week to obtain the number of product items, cases, and vendor orders received each day. Arrival and departure time was obtained for each vendor delivery as well as a description of handling methods and equipment that each vendor used. Store personnel time was measured for checking vendor returns and deliveries and for processing invoices. Costs were developed for each activity on a per-case basis counting a tray or basket of bakery product as a case. Based on information obtained in the study and simulations from standard data, a cost model for the consolidated warehouse distribution of DSD items was developed. This cost model includes delivery cost from vendor plant to consolidated warehouse; cost by warehouse function, including occupancy, materials handling equipment, and labor; delivery costs to the supermarket, including vehicle and labor; in-store handling costs, including price-marking, stocking, and handling returns; retail store cost for checking the order and processing invoices, as well as projected costs for ordering under the consolidated warehousing system; and billing costs for vendor and consolidated warehouse.