Round Table Series: Redistribution Services

Professional Development

The National Restaurant Association's Supply Chain Management Spring and Fall conferences have become the can't miss conferences for connecting with a community of supply chain professionals in the restaurant industry. Built by operators for operators these conferences supercharge your professional network and provide opportunity for robust discussion of solutions to your greatest challenges.

For the next several weeks we're highlighting round table discussion notes from our Curated Networking Session last October in Orlando, Florida.


Redistribution Services: Drivers, Advantages, and Future Trends

Redistribution services have become increasingly important in recent times, especially due to changes in distribution centers, freight outlook, and supplier constraints. In this roundtable discussion, we talked about the drivers behind the increased need for these services, the advantages they provide, and the future trends in this field.

What’s Driving the Increased Need for Redistribution Services:

Distribution Center Concerns:

  • Distribution centers are closing down and being replaced by multiple centers, resulting in decreased volumes and difficulty in meeting minimums.
  • Reduction of stretch miles has divided TL quantities, making it difficult for DC's to process and stock excess safety stock.
  • Warehouse labor and capacity constraints limit DC's from processing and stocking excess safety stock.

Freight Outlook:

  • Decreased freight capacity and increased LTL rates have made redistribution services more advantageous.

Supplier Constraints:

  • Unstable inventory levels due to ongoing production concerns and fewer on-time deliveries have made companies turn to redistribution services to secure safety stock and ensure continuous supply.

What Are the Advantages of Redistribution?

  1. Partnership with Suppliers: Redistribution centers can partner with suppliers to ensure steady orders, avoiding spikes that suppliers often see with DC orders, leading to improved production planning and increased inventory turns.
  2. High Minimums: Redistribution solves for high minimums that DC's may not be able to meet.
  3. Efficient Promotions: By choosing to put a one-time item through redistribution, distribution partners can avoid setting up new vendors, thus facilitating efficiency for promotions.

What Do We See as the Future for Redistribution?

 Future technological advances in redistribution services could allow for the detection of disruptions before they happen, leading to better and more efficient services.

Conclusion: The need for redistribution services has increased due to changes in distribution centers, freight outlook, and supplier constraints. The advantages of these services include better partnership with suppliers, solving high minimums, and facilitating efficient promotions. The future of redistribution services has the potential for even more advanced and efficient services with the help of technology.

Author: Supply Chain Scene