Poor Communication in the Retailer Supply Chain

"What we've got here is a failure to communicate."

This famous line from the movie, "Cool Hand Luke," could easily apply to the retailer supply chain.  Mid-sized CPG companies struggle to get the attention of large retail customers to forge more collaborative relationships.  That was one of the findings from a recent Auburn University survey of 110 CPG logistics executives.  Read the complete report: Key Supply Chain Challenges of Mid-Sized CPG Companies. 

Supplier-Retailer collaboration in the retailer supply chain is viewed as an enabler of forecast accuracy, process synchronization and cost reduction.  Said one survey participant:

     "There is a lack of receptiveness by retailers.  They are distant and unwilling to hear our concerns and ideas." 

Relative to their larger competitors, mid-sized CPG companies report that they do not have frequent, extensive communication with retailers, who tend to focus on the suppliers who drive their revenue.  Retailers know they have the leverage in the relationship and seem more interested in compliance than collaboration.

Discussions with suppliers suggest that it is not uncommon for retailers to change service requirements without regard to cost implications.  One supplier commented:

"Retailers constantly change delivery and inventory demands and then impose punitive actions for non-compliance."

The CPG manufacturers surveyed did suggest the following strategies to enable great collaboration in the retailer supply chain:

• Improve forecasting
• Invest in technology to enhance connectivity and synchronize supply chain processes
• Work with 3PL providers who have strong relationships with retailers. 

Read the complete study on challenges for the mid-sized CPG company in the retailer supply chain.