So, when you are out there commuting to and from work every day, have you ever noticed the large number of food service distribution (FSD) trucks busily going about their daily route deliveries? And, have you noticed that a large number of them seem to service customers in the same geographic area? It doesn’t make any difference if they are the big guys, regional, or local mom & pop distributors. It’s just the way of life in this “bubble” industry, in which the guppies are trying to keep from getting eaten by the big fish, and it’s every man for himself.
It is somewhat ironic that many of the medium- to large-sized FSDs use some type of fleet routing system to “optimize” their delivery routes in the hope of “optimizing” their fleet operating expense. (The small fry FSDs just load and deliver and pay lip service to delivery route optimization, settling for fixed-route driver inefficiency as an accepted way of doing business). BUT, what if the FSD industry were to devise a way to develop an industry segment-wide distribution network in which customer delivery routes were delineated by dedicated geographic delivery areas?
Think about that. Instead of having six different FSDs delivering daily to the fast food places and restaurants at your local mall, one designated FSD would deliver daily orders to all six. What would this save? How much more efficient (from a distribution fleet standpoint) would this approach be? Consider how far each FSD has to drive to get to their customer’s location in the mall (chances are many of these are not local delivery runs), and the cumulative time and expense it takes to service just this one mall location. Still think the delivery distribution network is being “optimized”?
Clearly, sales and profit optimization takes precedence over distribution network optimization. But if the FSD industry were to find a way to outsource their collective distribution requirements, the net benefit in terms of operating efficiency and cash flow optimization could be staggering. Think about it.