Leading the next era of logistics: direct dispatch for efficiency

Ever wondered about the journey our products take from factory to shelf?

Typically, they move from where they’re made to where they’re sold via distribution centres (DCs). Trucks pick up pallets of products from one of our factories and drop them off at a DC, where they’re unloaded, organised and stored. Then, when we receive an order, they’re picked, loaded onto another truck and shipped to the retailer.

There are a host of reasons why this model works. For example, in most instances, a customer will order a mix of Unilever products – cleaning and laundry, nutrition, beauty and personal care – which originate from different factories. The DC will hold all these in a vast warehouse, then pick, pack and ship them out as one delivery.

But there are certain circumstances where we can make the process even more efficient through ‘direct dispatch’. This is where we distribute straight from the factory to the customer.

The added value of direct dispatch

We’re increasingly implementing this model across our logistics network because it delivers a number of benefits.

Firstly, it’s quicker. The customer places an order and we deliver it straight to them, avoiding the need to load, unload and store the products in a separate DC.

It invariably reduces the distance our trucks travel, as we make one trip to the customer site rather than to the DC, then to the customer. This saves fuel and, in turn, the associated greenhouse gas emissions as well as reducing touchpoints to eventually be more cost efficient.

“It reduces travel time and distance, lowering our carbon footprint while at the same ensuring excellent service to our customers. It is a win–win for us and our retailers.”

Implementing at speed

The viability of direct dispatch relies on sending full shipments of just one or two product lines from a single factory, so it suits our largest customers. It also suits our Home Care products as they tend to be bulkier. So, for example, a retail partner may order enough boxes or bottles of laundry detergent in one go to fill an entire truck.

The model is already in place to varying degrees across the globe. Right now, the highest number of factories using the model are in Latin America and South Asia. We have plans to increase our portfolio at our largest factories and build infrastructure and capabilities significantly over the next few years, with major projects underway in Europe, North Asia, Indonesia and South East Asia.

“This is about finding what works best for each customer and tailoring the solution accordingly, whether it’s direct dispatch or a traditional model,” adds Michael.

“We’re constantly evaluating more sites and routes all over the world and, where it makes sense, implementing at speed. Each one we add to the list is another step in our logistics operation becoming more efficient, productive and sustainable.”