Adoption of new consumer technologies and the growth of online retailing will create opportunities for retailers and manufacturers but supply chains will be driven by the need for shared information, according to the IGD’s head of supply chain, Tarun Patel.
Speaking at the IGD Supply Chain Summit 2010, Patel said recent research conducted in 15 countries among 40 retailers and with 130 supplier responses, revealed collaboration was stepping up.
“Twenty one per cent of suppliers have a supply chain partnership, up from 15% last year,” said Patel. “It’s moving in the right direction.”
Patel highlighted types of collaboration in markets such as the US, where the top eight retailers control 50% of the market; and the UK, where the top five have an 81% market share.
“It’s encouraged suppliers to make closer relationships,” he said. Patel revealed the retailer’s collaborative tools such as Wal-Mart’s packaging score cards and supplier sustainability assessments and Tesco’s three stages of supply development – competent, respected and famous – which is reported to have driven higher engagement.
Patel said companies which had the most developed collaborations were more likely to regularly achieve 98.1% service levels and presented key steps to improve performance.
Measure and understand the issue
Redesign and pilot a new way of working
Roll out and sustain so that it becomes everyday
Patel stressed the importance of collaborating when it made sense rather than not and future impacts such as meeting consumer demand for value and values plus aligning networks to meet the growth in online and convenience retailing.