KANSAS CITY, MO — As supply chain challenges persist, commercial bakery manufacturers are faced with making difficult decisions in how — and how fast — they get product to their customers. For CPG startups, it’s often even harder to navigate smaller-scale distribution.
During an Emerge Network webinar, Rodd Willis, director of natural and specialty at DOT Foods, outlined resources to consider that can ease supply chain woes. DOT itself is one of those resources — it acts as a customer and purchases product directly from manufacturers, and then it distributes to foodservice and retail channels.
“We actually buy the product and act as a customer,” Willis said.
While that might seem like an added layer of complexity, Willis noted that it can alleviate some of the stress from a small manufacturer.
In some cases, it actually allows the manufacturer some flexibility in terms of required minimums without incurring extra cost. That can create new customer opportunities that might have otherwise been passed up, especially for smaller runs.
This is also a challenge for those smaller brands who can be nimble operationally but might not have the resources to ship several small orders to different locations.
“If a customer wants to order less than the minimum, and you have to ship a pallet at a time across the country and then deliver it to someone, we’re picking up in truckloads and bringing it back into our system for less money than it would cost to ship the pallets,” Willis said, noting that products in DOT’s system can ship in two- to four-day lead time, sometimes in quantities down to a single case.
“It really comes down to how can you have a fast, easy way to get product to your customers without killing yourself on costs,” he added.
Although DOT functions like a customer in terms of purchasing the product for distribution, it’s important that bakery manufacturers don’t think of the sales incrementally. Putting products into the DOT system one or two at a time can become counter-productive to the efficiency, Willis explained.
“We want to make the entire product line — where it makes sense — available to any customer in any channel where it works best,” he said. “If you produce 20 items, and 10 of them are for grocery and 10 for foodservice, we would work through that so all 20 items are available for any of our customers to order. It really all depends on your specific circumstance and what you want to accomplish, and we have a system for that.”
For CPG manufacturers, supply chain woes don’t end with what they can or can’t get from their suppliers. On-time delivery of finished goods is just as critical, which DOT touts as a point of differentiation. The company has its own fleet and drivers and does not rely on third-party distribution.
On the foodservice side, Willis noted that DOT sells into more than 2,500 foodservice distributors in a range of sizes, while retail deliveries head to warehouses and distribution centers.
The goal for DOT is to alleviate bottlenecks in distribution and potentially remove a pain point in the process. The company has committed to invest more than $300 million in its operational capacity — including a new warehouse, increased recruitment efforts and capital investments in automation — to better navigate the supply chain heading into 2023.
Additionally, DOT has launched its own driving school for enhanced training and professional development for its drivers.
Ultimately, though, successfully breaking through the distribution bottleneck is a collaborative effort between DOT and its customers, and it requires thoughtful planning from the manufacturer.
“It’s counterproductive to just load up our national system with your product if you haven’t gone out and sold any of it yet,” Willis said. “There needs to be some throughput in order for the system to work instead of product collecting dust in the warehouse. It doesn’t necessarily have to be already established business, and if you have a new account, we can use it as a jumping off point. We can be part of the process up front.”
For more information on DOT’s partnership with Emerge and other resources in the network, visit the website.
