Liquor distributors are using an. innovative delivery system. to consolidate distribution operations. for increased profitability and efficiency.

Transcription

1 Liquor distributors are using an innovative delivery system to consolidate distribution operations for increased profitability and efficiency. DEMOUNTABLE CONCETS, INC.

2 This truck-based system offers a cost-effective alternative to brick and mortar warehouse distribution operations. Faced with escalating costs, many liquor distributors are re-thinking the way they bring product to market. An ever changing economy and marketplace, where distribution can add up to a quarter of the cost of goods sold, has compelled several large liquor distributors to question the prudence of delivering product from multiple storage warehouses throughout their market (Figure A). W1 W3 W2 W4 This investigation has motivated some companies to consolidate their facilities into a single centralized distribution warehouse that services regional markets using a hub and spoke model (Figure B). Figure A. Multiple fixed location warehouse distribution operations Here are some of the challenges these companies faced: Traditional brick and mortar warehouses are expensive. The costs of heat, maintenance, taxes, staffing, etc. are considerable and are multiplied by the number of warehouses in the supply chain. ermanent warehouses are slow to adapt to change. Changing economic forces cause customer clusters to migrate from location to location. This transient marketplace makes using permanent structures for distribution a liability. W1 Figure B. Single-warehouse hub and spoke style distribution operation 2.

3 Each warehouse has similar operations, but is a separate cost center. Each regional warehouse maintains an inventory of similar product and distributes it to customers but is treated as a separate business unit, resulting in duplicate costs and unnecessary work for managers. The answer: Consolidate operations utilizing the Warehouse on Wheels System. Liquor distributors are turning to the Warehouse on Wheels distribution system by Demountable Concepts, Inc. to consolidate their operations and replace warehouses with truck-based distribution systems. With Warehouse on Wheels, inventory is loaded into multiple bodies on a semi-trailer at a central warehouse (Stage 1) and shuttled to regional markets, where straight-trucks pick up the corresponding body for their delivery route (Stage 2). Stage 1: At Your Distribution Center Stage 2: At the Regional Marketplace The bodies from the previous round of deliveries are loaded onto the empty semi-trailer and returned to the warehouse for reloading. 3.

4 Demountable Concepts modifies new or existing fleets and supplies body companies with the components to make bodies interchangeable. Four bodies on a semi-trailer being hauled to a regional market. The Warehouse on Wheels utilizes three basic types of equipment. 1. A self-lifting semi-trailer with a lock down system for mounting and hauling multiple bodies to regional markets. 2. Straight-truck power units for local deliveries with an added elevating platform and lock down system for quickly swapping bodies. A straight-truck picking up a loaded body to make local deliveries. 3. Interchangeable bodies which can be transported on both the semi-trailer and straight truck. Each body stands independently on retractable legs for swapping power units and loading dock access and can be used for portable storage space. Demountable Concepts has installation centers throughout the United States, Canada and Mexico. Four bodies standing on retractable legs serve as a regional distribution hub. 4.

5 rofitability, efficiency and flexibility are benefits of the Warehouse on Wheels. Warehouse on Wheels consolidation creates a positive ripple-effect throughout the entire organization. Frees-up capital and labor. Assets once used for managing multiple warehouses may be used for improving a single central warehouse. Reduces inventory and storage costs. Deliveries are made just-in-time by multiple straight-trucks servicing regional markets. Quickly adapts to changing markets. If a more advantageous location arises, the rendezvous point is easily moved. Very little infrastructure necessary. The Warehouse on Wheels can operate in a parking lot with minimal, if any, office space required. Lowered fuel costs. Loaded bodies are shuttled together on a semi-trailer, eliminating the need for separate trips for each body. Drivers arrive at the first delivery sooner. re-loaded bodies are shuttled to the regional market at night, or during low traffic times, and mounted first thing in the morning to begin deliveries. No change in customer-driver relationship. Your customers will perceive no change in your operation. Merchandise is still delivered by the same local driver. Load for multiple routes at the same time. Walk through doors in the front and rear of each body enable loading for up to four delivery routes at the same time. 5.

6 The Results: Warehouse on Wheels improves the bottom line for these liquor distributors. Republic National Distributing Co. Location: Atlanta, GA Opportunity: Consolidate three Virginia warehouse operations into a single statewide unit while maintaining daily service in all areas and a high level of customer satisfaction. Solution: Demountable Concepts, Inc. Warehouse on Wheels Delivery System. Inventory from a single centralized distribution center in Richmond, VA is shuttled on four bodies to the Norfolk and Northern Virginia markets on a semi-trailer. Upon arrival, Demountable-equipped straight-trucks mount the bodies and make their deliveries. Empty bodies are shuttled back on the semi-trailer and reloaded. Transfer drivers make this trip twice a night. Additional Benefits: Greatly reduced overall inventory and decreased need for safety stock 5 to 6 percent decrease on $15 to $20 million worth of required inventory Diverted capital into a state-of-the-art conveyor system in the Richmond warehouse Customers and local drivers continue established relationships No cross docking and local drivers spend entire day making deliveries Since investing in Demountable equipment, we ve been able to close a distribution center in Northern Virginia and one in Norfolk, VA, consolidating them into our Richmond, VA location. We have successfully been able to grow our business at a greater rate than the overall market and dramatically improved our bottom-line using the single distribution center for the entire state. Stefan Kirshenbaum Republic National Distributing Co. Vice resident and Director of Distribution and Logistics 6.

7 Georgia Crown Distributing Company Location: McDonough, GA Opportunity: Consolidate five warehouses into one distribution warehouse that services the entire state while maintaining a high level of customer satisfaction. Solution: Demountable Concepts, Inc. Warehouse on Wheels Delivery System. Inventory from a single centralized distribution center in McDonough, GA is loaded into multiple bodies and shuttled to outlying markets on semi-trailers. Each body is mounted by a straight-truck and the driver immediately begins his deliveries. The empty bodies are mounted on the semi-trailer and returned to McDonough for reloading. Additional Benefits: Diverted capital into a state-of-the-art material handling system in McDonough Restocked retailers quicker and more consistently Virtually eliminated shortages Can now handle more volume with less people roduct is trucked to regional markets at night to avoid traffic Local drivers deliver to first customer earlier We looked at cross-docking and other options, but the Demountable System offered more flexibility and was the most cost-effective system. Instead of a warehouse, all you need is a concrete pad and office space to service local markets. In the three years that we ve been using Warehouse on Wheels, our customer satisfaction levels have increased and we ve experienced virtually no down time. Bob Metcalf Manager of Special rojects Georgia Crown Distributing Co. Learn more about the Warehouse on Wheels System. hone: [email protected] Web: Free information on DVD available Complimentary Fleet Cost Analysis 7.

8 About the Author Rustin Cassway is the resident and one of the founders of Demountable Concepts, Inc. He can be reached at To find out more about how the Warehouse on Wheels System increases profitability and efficiency please contact us at: or visit About Demountable Concepts, Inc. Demountable Concepts, Inc. was founded in 1989 to work hand-in-hand with truck body manufacturers and truck suppliers to furnish the best demountable systems in North America. Demountable Concepts installs a lift and lock down system onto truck power units and supplies body companies with the components to make bodies interchangeable. DEMOUNTABLE CONCETS, INC Demountable Concepts, Inc. All Rights Reserved. No part of this publication may be reproduced without the prior written permission of Demountable Concepts, Inc.