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Food and beverage, cosmetic and retail industries

Why improving collaboration with suppliers is so important?

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  • November 4, 2015
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To overcome today’s challenges, smart retailers are taking a more focused look at collaborating with their supplier, seeing them as partners. A successful retailer-supplier collaboration can help smooth pressures along the product lifecycle. A strong partnership brings products to market faster, reduce costs, increase sales and market share, while maximizing ROI for both parties.

Main reasons to improve collaboration are:

  • Revenue enhancement: Working jointly to harness complementary skills is key to better anticipate and react to commodities price volatility. It becomes a real challenge for food companies and retailers to ensure sustainable margins. Crops, dairy products, oils, chemicals, etc. have high influence on companies’ bottom line results. It is crucial to collaboratively work on quick adjustments to maintain high margins on both sides.
  • Cost reduction: Collaboration reduces administrative tasks and improves communication. It also facilitate specifications sharing process through web collaboration both for initial specifications -used to create a new product from scratch- and updated specifications – it assumes an effective change management and a robust impact analysis.
  • Market shares : Through innovation performances, collaboration also grows market shares and accelerates innovation providing:
    – More disruptive ideas
    – Better decision making process
    – Greater success rates
    – Fewer errors
    – Reduced risks
    Innovation performances also includes time to market rush. Being successful with time to market is heavily dependent on a highly effective planning process and error-free execution in both organizations.
  • Process improvement: A wide range of supplier-related processes can be improved by more intense retailer–supplier relationships. Many retailers are eager for more quality and traceability and ask their suppliers to comply with up-to-date food standards. Processes include sourcing, product specifications, quality certifications, recalls, promotion planning, execution, and all the supply chain processes.

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