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The State of Retailer-Vendor Supply Chain Relationships 2018

Jan. 31, 2018

Dan Gilmore

Editor

Supply Chain Digest

Supply Chain Digest is back with our second biannual benchmarking study on the state of retail and vendor relationships and collaboration.

This year's report, based on a survey of 44 retailers and 165 consumer goods companies, of course comes at a time of immense change and stress for both retailers and many vendors, as ecommerce, Amazon and changing consumer behavior play havoc with many areas of these industries.

Supply Chain Digest Says...

"The number of deductions year over year has decreased, however the amount we have collected has increased because the violations have hit higher tier dollar amounts," one retailer said.

Also interesting, 2017 also saw major news on the retail-vendor front, as both Target and Walmart announced programs in 2017 designed to reduce
supply chain variability associated with vendor shipments, notably on-time and fill rate performance.

Both retail giants are tightening the requirements and increasing the penalties for underperformance, in moves that could have huge ramifications for the consumer goods to retail supply chain.

In fact, we added a couple of questions about this trend to our survey this year – and those results are interesting.

Once again, there were a lot of interesting data – and comments – relative to the always controversial subject of chargebacks.

As seen on the chart below, we asked both retailers and vendors for their views, and the results and comments were quite interesting. 44% of retailers say their chargeback levels are growing, whereas vendors see things a bit differently, with 55% indicating they are seeing rising chargebacks.

 




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We're not quite sure how to reconcile those two data points. Regardless, more on both sides say chargebacks are rising than in the previous study, where 36% of retailers and 51% of vendors saw chargeback levels increasing.

The comments from retailers and vendors on this topic were quite interesting.

"The number of deductions year over year has decreased, however the amount we have collected has increased because the violations have hit higher tier dollar amounts," one retailer said.

On the vendor side, one noted that "Our chargeback levels are rising due to changes in retailer requirements plus internal manual efforts to be compliant, which results in human error. Also, retailers are becoming less willing to bend when requesting leniency for one-time violations."

The excellent full report can be found here: The State of Retailer-Vendor Supply Chain Relationships 2018

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