Redistribution adds value in the foodservice and retail supply chain by streamlining product velocities and dramatically reducing costs. As illustrated in the chart below, without redistribution, manufacturers would produce products in their plants and then move them to forward warehouses or company distribution mixing centers, and then on to food distributors ranging from small local distributors to very large national operations. These distributors then deliver the products in the smaller quantities needed to the restaurants. Because many foodservice and retail distributors cannot cost-effectively utilize truckload quantities, higher-cost LTL transportation solutions are required on slower moving or seasonal or promotional items. In contrast, with redistribution in place, manufacturers can efficiently ship truckload quantities to the redistributor — CDC — which in turn ships full (mixed) truckloads of products to foodservice and retail distributors. The results are optimized supplier production runs, lower distributor safety stock, and increased inventory turns and efficiency in the entire foodservice supply chain.
Redistribution and the CDC Model
CDC buys qualified redistribution products from the manufacturer or vendor and ships these items to our warehousing facilities in truckload quantities. We then are able to create full TL shipments of consolidated SKUs of product to the distributor. This process creates a lower landed cost and a higher reliability of slower moving or time sensitive in-stock product. An optimized supply chain network allows customers to negotiate with a manufacturer and know that the product will arrive at the restaurant with a reasonable distribution cost markup and a lower freight rate. CDC provides reporting to the chains/co-ops that allows them to determine what their total landed cost should be by SKU. This transparency helps to reduce the extra costs that were previously hidden in the supply chain.