Our innovative ‘direct dispatch’ model, which ships products directly from our factories to retail customers, is revolutionizing the efficiency of our logistics operations. In this article, we explore the benefits of this approach and the regions where it’s being implemented.
Direct dispatch is a strategic method to optimize our end-to-end supply chain. By cutting travel time and distance, it reduces our carbon footprint, minimizes touchpoints, and ensures superior service for our retail customers.
This model will significantly expand over the coming years, with key projects already underway in Europe, North Asia, Indonesia, and Southeast Asia.
Understanding the Journey: From Factory to Shelf
Traditionally, our products travel from factories to retail outlets via distribution centers (DCs). Products are picked up from our factories, delivered to a DC, unloaded, organized, and stored. When an order is placed, the products are then picked, packed, and shipped to the retailer.
This model works well for various reasons. Customers often order a mix of products—such as cleaning supplies, nutrition, beauty, and personal care items—that originate from different factories. DCs consolidate these products in one location, allowing them to be shipped together in a single delivery.
The Added Value of Direct Dispatch
In specific scenarios, direct dispatch can make this process even more efficient by delivering products straight from the factory to the customer. This model is gaining traction in our logistics network because it offers several advantages.
First, it’s faster. When a customer places an order, we deliver it directly, bypassing the need for intermediate unloading, organizing, and storage at a DC.
Direct dispatch also reduces the travel distance for our trucks. Instead of making separate trips to both the DC and the customer, we make a single trip directly to the customer. This approach saves fuel, cuts greenhouse gas emissions, reduces touchpoints, and ultimately becomes more cost-effective. Direct dispatch is integral to increasing efficiencies in our end-to-end supply chain and plays a crucial role in achieving the cost savings and sustainability goals outlined in our Growth Action Plan.
Michael O’Connor, Home Care Global Supply Chain Strategy & Long-Term Planning Manager, explains:
“It reduces travel time and distance, lowering our carbon footprint while ensuring excellent service to our customers. It’s a win-win for us and our retailers.”
Rapid Implementation Across the Globe
The success of direct dispatch depends on sending full shipments of one or two product lines from a single factory, making it ideal for our largest customers. It is particularly effective for our Home Care products, which are often bulkier. For example, a retail partner may order enough boxes or bottles of laundry detergent to fill an entire truck in one go.
This model is already being used to varying degrees across the globe, with the highest number of factories adopting it in Latin America and South Asia. We have ambitious plans to expand this model at our largest factories, with significant infrastructure and capability enhancements planned over the next few years in Europe, North Asia, Indonesia, and Southeast Asia.
