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NEW YORK -- In an effort to squeeze inefficiencies from direct-store distribution (DSD) models, 7-Eleven will undertake an experiment in southern California later this year, according to company CEO Joe DePinto, who revealed details of the test at the Beverage Forum 2008 held here last week, reported Beverage Business Insights.
While not entirely by-passing DSD -- which DePinto called "fragmented" and "inefficient" -- the test will bring rival brands on the same truck to each 7-Eleven store from a single, consolidated warehouse. The purpose is to minimize delivery runs, the magazine reported.
He also called for a migration to a green, efficient system by which "like products are delivered on the same truck," Beverage Business Insights quoted DePinto as saying during his presentation.
At the forum, he described DSD as a model that generates chaos at store level, clutters small parking lots during high consumer traffic periods and leaves fast-moving items out of stock while slower-moving items gather dust, according to the report.
In a recent interview with CSNews Online, DePinto emphasized how important it is for the c-store industry to overcome the inefficiencies of some DSD systems. "For the health of the whole industry, let's figure out how to make it more efficient and take the savings and share them across the supply chain -- with manufacturers, distributors and retailers," he said.
The test was described as voluntary, but DePinto told attendees he expected enough key players to cooperate so he can launch it after conclusion of summer selling season, according to the report. Anheuser-Busch and Coca-Cola are believed to be aboard, other sources told the magazine, which noted that 7-Eleven may be seeking Miller and Pepsi for the test as well.