I recently received a direct mail marketing piece from a HighJump Software competitor. The mailer included a press release announcing that this company had “enhanced direct store delivery integration” and a one page datasheet which described a direct store delivery value chain as manufacturing + regional warehouse + mobile resources + retail shelf.
HighJump Software is the North American market leader for direct store delivery software solutions. If our primary competitor in the warehouse management systems market had encroached on our market position I needed to know. Perhaps they had acquired a route accounting solutions provider or acquired a provider of mobility solutions for mobile selling and delivery at the retail location. I consulted a trusted industry analyst who confirmed my suspicions… this was marketing hype and this company’s approach to direct store delivery still had significant “holes.”
Anyone familiar with the value chain of direct store delivery companies knows there are some specific complexities that must be addressed in order to have “comprehensive coverage across the extended supply chain.” Here are some things companies should consider when search for direct store delivery software solutions:
Certified Route Accounting Systems
Route Account Systems are unique software systems to manage the complexities of route-based sales and delivery. They typically manage the entire order-to-cash cycle and are geared toward the world where sales, inventory, and business metrics are all tied to a “route.” Although traditional ERP systems can be used for route accounting systems, they typically require customization to deal with complex pricing/promotion, cash settlement, truck inventory, and supplier e-commerce integration. To further understand the complexities in the beverage value chain read It is Hard for Anheuser-Busch to be Procter and Gamble.
Mobile Sales and Delivery Applications
Success or failure in a direct store delivery business is determined at the store shelf. Direct store delivery companies have large workforces of mobile sales and delivery professionals who need to be equipped with mobility technology for them to effectively accomplish their objectives. HighJump Software provides a comprehensive suite of mobility products which support industry best practices for order capture, goal-based selling, delivery tracking and cash settlement. For more details on these solutions read about our latest mobility suite product release HighJump Software Enhances Mobility Solutions With New Release of Mobile Route Sales and Delivery Software Suite.
Load Optimization
Optimized loading of side bay beverage trucks can be complex. While there are numerous packages for creating optimized load plans of traditional van trailers or flatbed trailers, optimizing for side bay beverage trucks is another animal. Additionally, this business problem becomes even more complex when you have a “peddle” environment (driver selling off truck without pre-sold orders) and driver preferences must be taken into account at the load and pallet level.
I think the moral of the story is “don’t believe the hype.” Direct store delivery software solutions are specialized for the unique needs of this industry. Direct store delivery software solutions deal with complexities of supplier integration, cash settlement and truck inventory. A WMS, TMS and retail workforce solution will not meet the needs of most food and beverage distributors in their direct store delivery operations.
Being in the handheld based solution business for quite awhile now, there is this voice in my head that keeps saying that there is more to the whole Smartphone thing than simply changing the device we capture our mobile sales, service and delivery transactions on. The fight for the mobile desk top is still raging on and there is no clear winner in sight. Open architectures that can span the operating systems will have a definite advantage. In the ruggedized space, at least for the near term, Microsoft rules the way. However, that cannot be said for what is being carried in the pockets of executives, sales people and even the man on the street.
There is an interesting term I have heard over the years about people who do the actual direct store delivery job. It goes something like, “If you are smart enough to do the job you may be too smart to take it.” The implication is that to do a really good job you need to have a kind of personal discipline and commitment to success as well as skill with people and sales that are not often found in industries where there is such a physical component. I have had the pleasure of working with and meeting many superstars in this industry; they are truly one of a kind individuals and are very talented. There is a true disconnect between the incentives put in place for many of these talents and a kind of regimented distrust that is prevalent in the DSD industry.
There is this ago old idea that if your route sales team could serve customers faster, they would be able to serve more customers in the course of the day. If you could do that, you might be able to operate fewer routes. In a vacuum, that is great logic and makes a ton of sense. However, there are two things that get in the way and need to be a part of the capacity planning process for your Direct Store Delivery (DSD) environment.
What if we were to take that top 20% that provide the bulk of the revenue and change our model so that they are served better? Maybe they will be served more often or by more people. The idea here is over-serve our best customers and partner with them to improve our already thriving and profitable business with them. This might include having an account manager/sales person, a merchandiser and delivery function where it makes sense. We may serve them 7 days a week where other customer may be served 3 or 5 days a week. The idea here is to get better at what we are already good at and build on our strengths.
ESP is all you need to get it right every time. Now back on planet earth we need a slightly better approach. Most of our mobile sales (DSD) customers are after that magic pill that tells them exactly what to have on the truck and what everyone will sell. The problem is that no one can really tell you how to calculate it. The good news is that it is easier to predict what your total volume of customers will buy vs. an individual customer. The law of averages works in your favor. In our adventures in selling direct store delivery solutions, everyone says they want to pre-populate their orders for their drivers and salespeople. Sometimes we are talking about just putting in a shopping list of products that this customer normally buys and then adding the quantities later. Some people want to be a lot more scientific. Often the question of how to calculate the perfect order is met with a stunned silence. What about the scientific approach?
Every conversation I have had with a new customer around automation always seems to include some discussion of reducing paper. Many customers have been extremely successful in reducing the paper that is generated internally. Some technologies that are specifically using direct store delivery software include DEX and/or EDI to limit or eliminate customer-side paper. This works very well for large customers. With that said, it is amazing how often these electronic transactions are supported by a printed form. It’s a bit crazy if you really think about why these systems were developed in the first place. Most convenience stores, gas stations and restaurants are still operated by local owner operators and these technologies are not readily accessible to them. They are stuck with, wait for it … more paper.
As I begin blogging, I hope my thoughts are useful to some you out there. The power of the internet is the transactions and interactions that it creates. This is where collaborative magic happens and I look forward to the conversations and feedback that are created.
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