From the anonymous author ( I do not necessarily agree, but the last sentence is spot on):
"My initial thoughts: Under the suppliers choice model, grocers would still work with several major distributors, not so many that you'd bottleneck the store at receiving. You wouldnt have a dozen DSD's plus a half dozen consolidated distributors. The big point with suppliers choice is you take away the ability for distributors to make these cost plus contracts that are not feasible and they would have to begin marking their products up at a rate that is reflective of their actual costs. Competition would also force the distributor to operate more efficiently as their suppliers could leave them if they are unable to keep up with orders."
Another great article! I have a question re 'Supplier's Choice'. I'm old enough to have been around in the Chicago grocery market when Kehe, Skandia Foods, European Imports, Ryser Foods, Blooming Prairie, HFI, Rainbow Wholesale and about a dozen other smaller specialty foods distributors were stocking a lot of the same products and brands (Wasa Brod, Lindt Chocolates, Stonyfield Yogurt, etc.). The major grocers at the time, Jewel (American Stores) and Dominick's had an issue with manning the receiving docks at store level to accommodate all these distributors, along with Coke, Pepsi, Frito, fresh bread vendors, Ice cream trucks and the other 'roll in to the store' DSD suppliers and receiving clerks would have to be paid overtime if a truck was running late etc. The impetus to consolidate to one or two distributors from 8-12 was simply a labor management issue at store level and controlling the hours the back door was opened and manned. How would 'Supplier's Choice' address this issue? Why would a major retailer go back to the days of too many receiving hours at store level to benefit the vendors? And if the answer is to cross-dock all these distributor's items at a grocer's warehouse, that means more receiving hours at those warehouses and doesn't address chains and stores that don't have warehouses, like Whole Foods Markets, Gelson's etc.
From the anonymous author ( I do not necessarily agree, but the last sentence is spot on):
"My initial thoughts: Under the suppliers choice model, grocers would still work with several major distributors, not so many that you'd bottleneck the store at receiving. You wouldnt have a dozen DSD's plus a half dozen consolidated distributors. The big point with suppliers choice is you take away the ability for distributors to make these cost plus contracts that are not feasible and they would have to begin marking their products up at a rate that is reflective of their actual costs. Competition would also force the distributor to operate more efficiently as their suppliers could leave them if they are unable to keep up with orders."
Another great article! I have a question re 'Supplier's Choice'. I'm old enough to have been around in the Chicago grocery market when Kehe, Skandia Foods, European Imports, Ryser Foods, Blooming Prairie, HFI, Rainbow Wholesale and about a dozen other smaller specialty foods distributors were stocking a lot of the same products and brands (Wasa Brod, Lindt Chocolates, Stonyfield Yogurt, etc.). The major grocers at the time, Jewel (American Stores) and Dominick's had an issue with manning the receiving docks at store level to accommodate all these distributors, along with Coke, Pepsi, Frito, fresh bread vendors, Ice cream trucks and the other 'roll in to the store' DSD suppliers and receiving clerks would have to be paid overtime if a truck was running late etc. The impetus to consolidate to one or two distributors from 8-12 was simply a labor management issue at store level and controlling the hours the back door was opened and manned. How would 'Supplier's Choice' address this issue? Why would a major retailer go back to the days of too many receiving hours at store level to benefit the vendors? And if the answer is to cross-dock all these distributor's items at a grocer's warehouse, that means more receiving hours at those warehouses and doesn't address chains and stores that don't have warehouses, like Whole Foods Markets, Gelson's etc.