Similar problems are all too common among restaurant chains, even though they seldom get that kind of attention.
The Redistribution Option These trends all contribute to unexpected product shortages and drive more chains to include redistribution options in their supply chain agreements. In the right situation, redistribution can be a flexible tool that helps chains better manage critical product inventory levels while minimizing freight costs.
Most DCs receive deliveries weekly or more from a redistributor already.
This offers very significant freight cost savings redistribution option to the alternative — direct ordering less-than-full-truckload LTL quantities of needed products from a manufacturer at much higher freight and handling rates.
But in the right situations, it adds a lot of value by streamlining product velocities and dramatically reducing the costs of LTL deliveries.
When LTOs wind down, redistribution facilitates drawdown and disposal of any excess inventory that remains. And if supply interruptions occur for whatever reason, the use of a centralized redistributor can help a chain control the movement of limited available product supplies and recover from the interruption more quickly. Related Articles.