Retailers must move away from adversarial relationships with suppliers and prioritise collaborative ones where data is shared early and often via a secure communication channel.
Supply constraints have increased over the past year, so retailers must lay the groundwork that will ensure adequate inventory on shelves, both physically and digitally.
This is according to Andrew Blatherwick, chairperson emeritus and advisor at RELEX Solutions.
Blatherwick said: “In the past, suppliers have often sent representatives to work in the stores of their larger retail customers. But this is no longer necessary because we have the technology to create accurate forecasts, automate ordering and allow for data sharing without needing to be in the same place at the same time.
“The trick is to find a solution that enables retailers to work with suppliers in the way that suits each relationship best. Retailers, at the most basic level, should be able to share forecasts automatically and regularly with each supplier in their network.
“For the largest suppliers most important to the success of the business, they may also want to use a collaboration portal with near-real-time data sharing that provides greater supply chain visibility and enables both parties to pro-actively address potential challenges and opportunities together.”
When retailers use technology to collaborate consistently and transparently with suppliers, everyone benefits.
Up-to-date retail data helps suppliers react to sales shifts, gain insight into planned promotions, and understand the start and end of seasons in different regions, to better tailor their manufacturing and raw material procurement cadences to meet fluctuating demand.
Blatherwick continued: “Retailers that prioritise collaboration with their suppliers open a channel of information that can give them a competitive edge.
“With early knowledge of availability and manufacturing issues, retailers have a better chance of avoiding out-of-stocks, minimising last-minute plan changes and improving promotion planning, all leading to a better end-user experience.
“Improved collaboration improves supplier-retailer relationships at the ground level; the better the relationship, the more likely a supplier can prioritise a retailer’s requests.”
Blatherwick further said: “When suppliers make informed, intelligent decisions about manufacturing and production, retailers can ensure that they’re getting the products they need to meet demand. In the end, this all makes it easier to move goods through the entire supply chain while improving long-term working relationships — with less strife.”