GMA 2012 Direct Store Delivery Survey Q&A

Overall questions

Should I include warehouse delivery and/or Foodservice operations in my responses?

We excluded both warehouse delivery and Foodservice for the purpose of this study and companies are only asked to report their retail DSD data. To keep responses comparable across companies, please do not include any warehouse delivery or foodservice operations in this survey. If you also have warehouse delivery operations, we would appreciate your participation in the separate 2012 GMA Supply Chain Logistics Survey. If you would like to participate and have not already received a copy of this survey, please contact Elfrun von Koeller.

Should our data reflect sales to grocery stores only, or should we also include other retail channels such as mass merchandisers, discount stores, club stores, and convenience stores?

Retail sales data should include all of retail channels (grocery stores, mass merchandisers, discount stores, club stores, convenience stores, etc.).

Page 3: DSD Network Background & Performance (I/III) questions

Should annual sales be reported as gross sales or net sales?

Please report gross annual sales.

How do you define van sales, pre-sell, merchandising and delivery routes?

These four route types fall into two categories: traditional and multi-person DSD networks.

Traditional DSD networks are comprised solely of van sales routes. On these routes, a DSD rep carries "rolling inventory" on their truck and handles all in-store inventory-checking, selling and merchandising activities and delivers product from the "rolling inventory."

Multi-person DSD networks are comprised of multiple reps, each with a specialized function. On a pre-sell route, reps visit stores first to check inventory and create the order for the store. This order is then transmitted to the delivery function, and it is filled by a delivery rep on the next run of the delivery route. On separate merchandising routes, reps handle all in-store merchandising activities.

Page 4: DSD Network Background & Performance (II/III) questions

Does annual cases delivered refer to number of different SKU's, or the actual number of individual cases shipped?

The purpose of this question is to assess overall throughput, so it refers to the actual number of cases shipped. The same holds for total weight shipped annually.

For the annual sales, cases delivered and weight delivered metrics, how should I account for different types of routes (van sales, pre-sell, merchandising and delivery)?

These annual figures should reflect the total annual throughput of your DSD operations, without any double-counting. Therefore, you might consider them to be the combined value/count/weight of your van sales routes (where selling and delivery are done by one rep) and delivery routes (where selling and merchandising may be done by others, but the delivery rep physically transfers the product). If you have separate merchanding routes, you will be able to indicate the approximate number of cases "touched" by these reps in the DSD cost benchmarking section of the survey on page 6.

Page 5: DSD Network Background & Performance (III/III) questions

How do you define an intermediate warehouse? Does a DC (mixing center) or overflow warehouse count? What about upstream warehouses, such as plant-based warehouses that may also ship to customers?

Intermediate warehouses would typically be warehouses that store finished goods (downstream from plant) and are also not the retailer DC / warehouse at the store. Both a DC and an overflow warehouse would be considered an intermediate warehouse. However, there is one question on page 6 that specifically asks how much of your warehouse space is overflow space.

For plant-based or upstream warehouses, only include those warehouse where finished goods shipments to customers comprise a significant proportion of their activity.

Should days of inventory on hand also include "rolling inventory" in DSD trucks that is out of the warehouse but not yet sold?

Yes, since "rolling inventory" is still owned by the supplier, it should be included in calculation of days inventory on hand.

Does annual shrink & damage costs / sales refer to the costs to the supplier only, or should this also include the shrink / damage cost (or estimate) at the retailer?

This should only include the costs of shrink / damage that occur within the supplier's DSD system. Therefore, the retailer shrink / damage cost will typically be excluded. However, if some or all of the on-shelf inventory at the retailer is covered by a SBT program (where the supplier owns it until final sale to the consumer), the shrink / damage costs associated with this inventory should be included.

If you have any additional questions regarding the survey, or if you would like to participate in an interview, please contact Elfrun von Koeller.