Supplier collaboration challenges
As consumers grow more demanding, retailers and food services need to ensure products and menus are available at the right time and at the right price. While it seems supplier collaboration has existed forever, it has become more essential for success.
While today’s food and beverage businesses are each facing significant but unique challenges, there are common goals that drive supplier collaboration – higher sales, increased profitability, and stronger business growth.
Even if many industries have already fully understood the opportunity of an optimized supplier collaboration management, it is important to truly collaborate all along the lifecycle to exceed consumers’ expectations.
Working jointly to harness complementary skills is key to better anticipate and react to commodities price volatility.
It becomes a real challenge for food services 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.
Collaboration reduces administrative tasks and improves communication. It also facilitate specifications sharing process through a collaborative web-platform 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, supplier collaboration also grows market shares and by providing:
- More ideas
- Better decision making process
- Greater success rates
- Fewer errors
- Reduced risks
To overcome today’s challenges smart businesses are taking a more focused look at supplier collaboration, seeing suppliers as partners. A successful collaboration can help smooth pressures along the product lifecycle. A strong partnership brings products to market faster, reduce costs, increases sales and market share, while maximizing ROI for both parties.
Indeed, an ECR-McKinsey survey shows that an effective collaboration between retailers and suppliers results in a 4.4% decrease in out-of-stocks and a cost reduction of 5.4%. It also increases revenues by 3.7% more than the average company.
Access our guides and whitepapers for your industry :
- Agri-food compliance: a global phenomenon. How can we adapt to it ? – White Paper
- Collaboration as a Key to Success in Retail – White Paper
- What has changed due to INCO? – Infographics