(Nov. 17, 2009)—Designed exclusively for foodservice distributors, the 2009 IFDA Foodservice Distribution Operational Benchmark Report identifies and analyzes operational factors that are important to the success of foodservice distributors. The report provides benchmarks and practice trends to help executives evaluate existing performance at their company. More importantly, the information can help distributors identify new ways to create improvement. The report, released in November 2009, was featured during a session at the ’09 IFDA Distribution Solutions Conference.
“This study clearly suggests that there is a direct link between superior operational practices and financial performance,” said Mark Allen, president & CEO of IFDA. “In today’s business environment where there is significant pressure on margins, seeking operational efficiencies is one strategy that can help companies remain competitive.
“It’s also very clear that companies that track their performance and manage against detailed metrics tend to achieve higher levels of performance than those that do not. Their performance parallels the level of details being measured. This report can be an important tool for companies to improve their bottom line year after year and helps support a disciplined approach to capturing key metrics,” said Allen.
The 164-page report contains 246 graphs and appendixes, providing a wealth of useful information for making improvements to attain higher efficiency, achieve greater profitability, and provide added value to customers. Companies that participated in this effort received a complimentary customized and confidential report that allows them to more readily compare their results with those shared in the report. To provide anonymity, no annual sales information or city locations are identified in the report.
To identify trends across the industry, data and certain operational processes were gathered from a total of 109 distribution facilities, including 80 broadline and 29 systems facilities. Participating companies submitted data for August 2008 and completed a survey questionnaire, which formed the basis of this report.
The report includes tables with Delivery and Warehouse metrics (Appendix 1). The tables are subdivided in clusters by customer mix based on varying percentages of street business including 70% and above, 60-69%, 50-59%, 40-49%, and 10-39%. A systems distributor table is also provided. Each table is further subdivided by Urban and Rural location. For the purpose of this report, “customer mix” is the percentage of street business (salesperson-driven) and the percentage of contract business (contract-driven) at any one location.
Within the Delivery Tables, participants indicated their delivery expense as a percentage of sales, delivery cost per case, percentage of overtime, as well as averages for stops per trip, pieces per trip, pieces per stop, miles per stop, pieces per mile, and cases per man hour. Within the Warehouse Tables, participants indicated their inbound and outbound cases per hour, thru-put, cost per case, warehouse expense as a percentage of sales, number of errors per 1,000 cases, and percentage of overtime.
Companies utilizing the report will readily be able to compare their operational metric results against industry averages that match their customer mix and geographic market area.
Within the survey questionnaire, participating companies provided insights in the following general areas:
Company General – identifies company and facility profiles, and average costs as a percent to sales.
Warehouse General – identifies practices relating to safety and sanitation, information sharing, warehouse layouts, incentive pay programs, productivity measurements, personnel, redistributor usage, and more.
Inbound Operations – identifies inbound scheduling, bar code usage, vendor compliance, receiving, put-away, and WMS practices and processes.
Outbound Operations – identifies bar code, case labeling, order selection, slot replenishment, palletizing, WMS, and loading practices and processes.
Transportation – identifies driver availability, routing systems and practices, productivity metrics, incentive pay programs, driver training and safety programs, leasing practices, trade-in frequencies, and fuel surcharge practices.
Fuel and Energy – identifies practices in routing, purchasing, tire management, fleet spec’ing, warehouse design, and energy management.
The report is available to IFDA Members for $175, non-members for $650, and non-industry for $850. To order a copy of the report, click here, or to order by phone, call (703) 532-9400 and ask for publication sales.
Please Note: Following publication of the first OBR in 2007, IFDA coordinated an effort to develop key metrics and clear definitions that should be tracked by distributors to improve profitability and performance. As a result, a Delivery Performance Template and a Warehouse Performance Template were created by IFDA’s Distribution Committee. A metrics and definitions document, IFDA Benchmarking Metrics and Definitions for Foodservice Distributors, was also created.Participants utilized these reports in the data gathering for the 2009 OBR. The templates and the publication are available below: