Warehouses without walls: dot foods makes cybershopping a reality

Nation's Restaurant News, July 18, 2005 by Caroline Perkins

Say you are a distributor with a supply of 7,500 stock-keeping units, or SKUs, in your warehouse. Requests for other items from your operator customers have increased, however, and the SKU demand is about 12,000. How can you keep your warehouse efficient and still satisfy your customers? Dot Foods to the rescue.

The nation's largest foodservice redistributor, based in Mt. Sterling, III., is taking shopping to a whole new level with its Dot Foods Virtual Storefront. The initiative extends the number of products available for sale by distributors by the thousands. It's a simple but brilliant concept.

Since I realize there may be some readers who are not familiar with redistribution, here's a quick version of Redi101: A redistributor does not distribute food and nonfood products to operators; it distributes to other distributors. Redi, as it is sometimes called (pronounced ree-dee), has been around for many years. Simply put, manufacturers like to ship in full trailer loads for efficiency and economics. Many distributors don't have the capital or the warehouse space to purchase full trailer loads. A redistributor buys a full trailer load, then delivers it in less-than-trailer-load quantities to a number of distributors, benefiting both ends of the channel. There are other, more complex reasons for redi, but that one is fundamental.

Dot Foods was started by Robert and Dorothy--thus, the name Dot--Tracy more than 40 years ago. The company now is run by Pat, John, Tom, Joe, Jane, Jim and Dick Tracy. Dick Tracy heads up the Virtual Storefront.

"It's a simple concept," he explained. "Operators often ask for items that their distributor doesn't have. We help them offer items for sale that they don't stock."

There are three levels of participation, primarily dependent upon the degree of technological sophistication in place at the distributor's location. The most basic is "The General Store." Distributor sales representatives, or DSRs, are given print lists of all products available to their customers through the Virtual Storefront. Customers place their orders, which then are transmitted to Dot by the distributor's purchasing department. Dot ships the products to the distributor, and they are sent with the customer's next delivery.

The mid-level program is called "The Variety Store." That is one stage up from print, between manual and fully electronic. Distributors can download their inventory lists in an Excel format from the Dot Expressway, which is Dot's online ordering network, or get a CD with the needed information. DSRs sell from these spreadsheets. There are three "checkout lane" options as well, ranging from a week lead time to cross-docking delivery direct to the operator by FedEx.

The cream of the virtual crop is "The Department Store." This is truly cyberspace shopping. All of the product information is loaded into a distributor's system along with its own in-stock items. The entire inventory is available to the sales team and to those operators who order online or from remote terminals. The ordering process is practically instantaneous back to Dot's system. Products are on the operator's shelves within a day or two.

Dick Tracy reported that Dot has seen the largest increase in sales of SKUs on the street side of the business, where operators are always looking for new items to refresh their menus. Meanwhile, Dot's distributor customers have been able to reduce the number of SKUs inventoried in their own warehouses, thus becoming more efficient. And manufacturers gain access to a whole segment of distributors they would not normally reach because of trailer load restrictions. So it's a winning proposition all around.