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A direct store delivery system is a form of inventory management in which products are sent directly to stores by the manufacturer for sale at those locations. This is in contrast to models that utilize a warehouse for a retail company, to which products are sent by a manufacturer. Those products are then sent from the warehouse to the actual store locations, which can introduce delays in merchandise being received at a store and other issues. A direct store delivery effectively eliminates this “middle man” and allows products to more quickly reach retail locations and customers.

There are a number of ways in which a company can use a direct store delivery system for receiving products from a manufacturer.

  • In general, however, inventory systems are used by a retail company to track products on the shelf or in excess at the retail locations themselves.
  • As inventory at the point of sale (POS) begins to dwindle, the manufacturer can then be notified through an automated system about the reduced product at the store.
  • This then creates a ticket or request for a direct store delivery from the manufacturer to that retail location that is low on inventory, though the actual delivery may take several days to fill and ship.

A direct store delivery system can also require the intervention of a store employee, usually a manager or associate tasked with maintaining store inventory.

  • Daily inventory counts or reports are used by this associate to determine when new inventory must be acquired and then send an order to the manufacturer.
  • Large companies can also have these inventory requests handled remotely, by employees that monitor inventory through computer systems, and then place orders for more product as inventory numbers decrease.
  • In the end, however, the products are shipped directly to the store location, rather than through an intermediate warehouse.

The use of direct store delivery, rather than warehouses, has some potential advantages and drawbacks.

  • By eliminating the warehouse in the inventory replenishment process, stores can receive products more quickly and companies may require fewer employees to accomplish the same task.
  • Dealing with manufacturers directly at the store level, however, can be complicated, and when issues with damaged or incorrect inventory arise, it may be difficult for store associates to remedy such issues.
  • Since direct store delivery systems are also frequently automated, there is room for error in discrepancies between the inventory according to computer counts and the actual inventory in a store.