DSD DEX: Why large retail chains are forcing DSD companies to use it

DSD DEX: Why large retail chains are forcing DSD companies to use it

In “Why is the DSD Distribution Still Working in 2023”, I explained why DSDs are important under current market conditions. But large retailers such as Publix, Kroger, and Walmart are increasingly encouraging or requiring their DSD partners to adopt Direct Store Delivery Exchange (DEX). This article explores the motivations behind DSD DEX adoption by retailers and provides insights into its implementation.

What is DSD DEX?

DSD DEX, or Direct Store Delivery Data Exchange, is a technology standard that enables real-time data exchange between suppliers and retailers during the DSD process. DEX was designed over 30 years ago and the reason why retailers started putting it into places is because they realized that receivers on the dock were inefficient in inputting data manually into their systems. They wanted a system that would expedite the receiving process, eliminate all discrepancies, and tie the payable from the retailer to the receivable to the distributor. Through DEX, retailers and DSD companies can exchange critical information, including inventory levels, order details, delivery confirmations, and sales data, leading to greater efficiency and collaboration.

How DEX Works: A Step-by-Step Explanation

To understand the process of how DSD DEX works, let’s break down the steps associated to an actual delivery using DEX.

Step 1: Open DSD Application. The driver initiates the DEX process by opening the DSD application on their device. The specific DSD application used may vary, as DEX is compatible with various applications in the market.

Step 2: Choose DEX Method. There are two ways to perform DEX. The first method involves having a pre-order that is already picked, packed, shipped, and pre-loaded onto the device. The second method involves physically creating the invoice or credit from the device.

Step 3: Search for Customer. The driver searches for the specific customer in the DSD application. Let’s say that the customer is Publix 10.

Step 4: Create Invoice. If the order is to be created on-site, the driver creates an invoice by selecting the desired items and quantities to be sold. Once the selection is complete, the driver marks it as “DONE.”

Step 5: Initiate DEX. After selecting the invoice, the driver clicks the “DEX” button on the top left of the screen. This action triggers a blue screen, indicating that the system is ready to perform DEX.

Step 6: Connect DEX Device. To initiate the DEX process, the driver connects a DEX device into the DEX port of the dock. Once connected, they click “START DEX” to establish a connection between the device and the retailer’s system.

Step 7: Transmit the Invoice. The DEX process starts, with the invoice details would be transmitted to the retailer’s system.

Step 8: Verify and Confirm. On the retailer’s end, the receiver uses a gun device to view the transmitted invoice details, including quantities, units of measure, products, and pricing. The receiver ensures the accuracy of the information and confirms the DEX process by clicking “DEX BACK.”

Step 9: Sync Changes. After the receiver confirms the DEX process, any adjustments made by the receiver are automatically synced back into the DSD application. This includes correcting quantities, handling price discrepancies, and addressing unauthorized products.

Step 10: Finalizing the Process: Once back in the DSD application, the driver can see any changes made by the receiver, including adjustments to quantities or prices. These changes are stored within the DSD application, and the DEX process for that particular invoice is finalized.

The video at the end of the article clearly explain how DSD DEX works.

Why large retailers are pushing DSD DEX?

Large retailers like Kroger, Publix, and Walmart may be incentivizing or even requiring DSD companies to adopt DEX for several reasons:

1. Enhanced Efficiency: DEX enables automated and accurate data exchange, reducing manual paperwork, errors, and administrative overhead. It streamlines the ordering, invoicing, and reconciliation processes, allowing faster and more efficient operations.
2. Improved Inventory Management: Real-time data sharing through DEX gives retailers better visibility into their inventory levels. They can monitor stock levels, identify out-of-stock situations, and plan replenishments more effectively.
3. Demand Planning and Forecasting: By receiving accurate and timely sales data through DEX, retailers can gain insights into product performance and consumer demand patterns. This information can support better demand planning, inventory forecasting, and decision-making regarding product assortment and promotions.
4. Supply Chain Integration: DEX facilitates seamless integration between the DSD companies’ systems and the retailers’ systems. It allows for better coordination of orders, deliveries, and data sharing, enabling tighter collaboration and synchronization between suppliers and retailers.
5. Cost Savings: DEX can help reduce administrative costs, paperwork, and manual data entry errors associated with traditional communication methods. By automating processes and improving accuracy, retailers can save time and resources, leading to cost savings in the long run.

I hope this article has been helpful to you. I will continue to post information related to warehouse management, distribution practices and trends, and the economy in general. If you want to know how Laceup’s solution can help you to successfully implement DEX, click the link below to schedule an exploratory meeting.

There is a lot of relevant information on our channel. Check out this video on the subject.