A distribution strategy where goods are delivered directly from the supplier or wholesaler to the retail store, bypassing the retailer’s distribution center. This approach eliminates intermediate handling steps, reducing labor costs, storage requirements, and product damage while improving freshness for perishable items.
DSD is particularly valuable for high-velocity products, temperature-sensitive goods, and items requiring specialized handling. Many beverage companies, bakeries, and snack food manufacturers use this model to maintain product quality and reduce time-to-shelf. From a warehouse management perspective, DSD requires sophisticated coordination between suppliers and retailers to manage delivery schedules, inventory visibility, and proof of delivery documentation.
While DSD can reduce distribution center throughput and storage needs, it demands robust vendor management capabilities and real-time inventory tracking systems. Retailers must balance the cost savings and quality benefits against the complexity of managing multiple direct supplier relationships and ensuring accurate inventory records across all delivery points.
