Distribution: Dunkin’ Donuts’ unique distribution center
A supply chain cooperative owned by the coffee chain’s franchisees keeps New Englanders caffeinated.
By Allison Manning, Associate Editor -- Modern Materials Handling, 11/24/2008
“American runs on Dunkin’,” donut and coffee shop Dunkin’ Donuts claims. But Dunkin’ franchisees run on their unique supply chain cooperative, called a DCP, which provides everything from the patrons’ coffee and cups to the shirts and pants its employees wear.
In the northeast, Dunkin’ Donuts are on nearly every corner, caffeinating New Englanders and making the Bellingham, Massachusetts-based distribution center the biggest and busiest in the country.
At 235,000 square feet, the DCP (which stands for Distribution Commitment Program) is a supply chain cooperative owned by the 2,700 stores in New England and upstate New York that it services. Members have an ownership stake in the DCP, paying $2,500 in membership fees. Rather than being owned by the national Dunkin’ Donuts brand, the franchisees are the owners.
There are five DCPs across the country, run by a national DCP entity, separate from the national Dunkin’ Donuts brand. The national DCP handles purchasing, distribution and member services for the franchises.
Director of Marketing Patty Healy, who said she bleeds Dunkin’ pink and orange, spoke about the saturation of stores in New England. In Rhode Island, there is one Dunkin’ Donuts for every 2,100 people.
Frequent users visit a store 12-20 times a week, she said, and account for 60% of a store’s business. But with the current economy, the biggest issue the DCP foresees is the lighter wallets of their heavy users. Instead of visiting their neighborhood Dunkin’ twice a day, users might brew their coffee at home, or forego that afternoon cup, directly affecting the stores’ sales.
The New England DCP deals in pieces – which includes everything a store needs, including coffee beans, filters, spoons, uniform shirts and restroom signs. Twenty-four million pieces are shipped out of Bellingham each year – compared to 65 million nationally, according to John Ditmars, vice president of New England operations. The DCP is a “one stop shop” for the stores, anything they need, the facility can service. The item list for their 25 Texas stores includes 1500 SKUs.
Of those incidental items, like cream cheese spreaders, iced tea spoons and clipboards, the DCP moves 4,000 a night.
Only two years old, the Bellingham DCP is the fourth New England center, after expansion forced them out of their former homes. But Ditmars said New England is almost full of their coffee and donuts, and doesn’t expect a move to another facility. They recently adopted a voice picking system, improving accuracy from the low 80s to the high 90s, and are looking at installing a full TMS and yard management system.
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