The Key to Retailer and Supplier Collaboration: Talking More

Recently, we interviewed 64 top logistics and supply chain managers on the topic of retailer and supplier collaboration in the supply chain.  Half were employed by retailers, the other half by consumer goods manufacturers.  We wanted to understand why truly collaborative retailer-supplier relationships are more the exception than the rule, despite the compelling evidence that closer collaboration results in greater supply chain efficiency.  (Read the full Retailer-Supplier Collaboration research brief.)

After combing through hundreds and hundreds of comments in the research about why collaboration is hard and how it could be improved, do you know what was, far and away, the most prevalent comment? 

“Retailers and suppliers need to talk more.”

For most of them, this meant direct communication.  Imagine that, customer and supplier sitting down and getting aligned on key business issues. In this day and age, when we look to technology to give us the answers, it’s interesting to see these players seeking a human moment.

The Benefits of Regular Retailer Supplier Communication

Several themes emerged in our analysis of the role of communication in retailer and supplier collaboration.

• Direct communication leads to alignment and clarity.
  • “Have the sales rep communicate with us constantly. This way, if there are changes, we are all aware and on the same page. There are no knee-jerk reactions.”
  • “We need regular meetings to specify deliverables with a date and a time. The best ideas add no value if they are not executed.”
  • “Sometimes we want to do different things. Communication helps get on the same page and may lead to agreed-upon compromises."

• Direct communication enhances trust.
  • “A regular, open dialogue ensures everyone that they will not be cheated…that collaborative initiatives will result in a win-win.”
  • “We need to communicate more and be honest with each other – more transparency.”
  • “Let’s work it out together. Educate both sides of the table with no finger pointing or defensiveness.”

• Direct communication supports continuous improvement.
  • “Constant communication leads to sharing of our respective needs and discussing how we can better meet those needs.”
  • “Consistent, face-to-face communication keeps cost down.”
  • “Better planning and communication, especially looking ahead in daily/weekly orders, can enable cost-saving shipment consolidation, which is not happening today.”

Real World Collaboration

KANE’s own work in the area of retailer and supplier collaboration reinforces the research findings. Some of our most valuable solutions for our customers were developed in response to visits to their customers – retailers, distributors and stores.

Through these on-site visits, we are able to better identify any receiving difficulties and the ideal way customers want to receive product. That’s the practical side. Perhaps more importantly, the visits communicate to the retailer that we care enough to invest time, energy and money to understand and respond to their concerns.  As a result, they become more willing collaborators.

In spotlighting the importance of communication in retailer and supplier collaboration, we are not minimizing the role of collaborative forecast models and visibility portals in consumer goods logistics. These and other technology-based solutions are essential. But don’t overlook the power of regular human moments between you and your supply chain partners.  Our business is moving products, but it’s people that make it happen.