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Gartner on Retailer-Vendor Supply Chain Collaboration Part 2

Jan. 29, 2020

Dan Gilmore


Supply Chain Digest

In the December Retail Vendor Performance Management Bulletin, we noted that the relationships and opportunities for collaboration between retailers and their vendors do not in our view receive a lot of attention from analysts, academics and other researchers and thought leaders in supply chain.

So it was nice to see a recent series of research notes from Gartner analysts Thomas O'Connor and Beth Coppinger on "Winning through Deeper Retailer-Supplier Collaboration."

Last month, we covered highlights from part 1 of the series, in a refreshed in September note.

Supply Chain Digest Says...

Gartner cites "end-to-end logistics planning and visibility' as one of the most attractive areas for collaboration.

Visit the Retail Vendor Performance Management home page to learn more
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This month, we do the same for part 2, delivered in a December research note.

One challenge to better retailer-vendor collaboration is that the changing business models in the ecommerce and digital era are requiring new skills and innovations in areas where many retailers and suppliers do not yet have strong internal expertise, Gartner says.

In this dynamic and changing world, Gartner says "A clear majority of retailers and suppliers are rethinking and elevating the importance of supply chain collaboration,' citing data from Gartner's Retailer-Supplier Supply Chain Collaboration Study that found that 73% of respondents indicated that the importance of collaboration will increase through 2022 compared to today.

That same Gartner survey found that the top enabler of increased collaboration for both retailers and vendors is trust in the partner on the other side of the table.

It also helps to develop better listening skills.

"What are the motivations of your partner? Where are the pain points in the supply chain that you can resolve by working differently together?' Gartner writes, adding that "From this understanding of needs, partners create solutions. They also will need to work together to understand and mitigate risks. From those efforts, mutual trust will grow to enable results neither can accomplish on their own.'

Gartner cites some examples of success with great collaboration:

• Unilever has partnered with a leading retailer to deliver $30 million in joint value. The partners share store-level data to drive improvements in forecast accuracy and improve on shelf availability.

• Molson Coors moved from a bottom-quartile performer to a top-quartile vendor by engineering a complete paradigm shift to start thinking like a retailer. The first step was redefining how the company worked with customers. The new mission called for listening to customers closely, speaking their language and resetting business key performance indicators (KPIs) and goals.


But critically, Gartner says data and visibility is at the heart of improving collaboration.
"Increasingly, the ability to gather, store and analyze large amounts of data and translate the results into insights and actions is a competitive advantage. Visibility is critical as well,' Gartner writes.

This is where the types of data available from vendor compliance and performance management solutions can play a key role, providing insight into a partner's logistics performance and variability, and using techniques such as leveraging data around the PO lifecycle to identify opportunities for supply chain improvement.

In fact, Gartner cites "end-to-end logistics planning and visibility' as one of the most attractive areas for collaboration.

Gartner also cites opportunities for collaboration with vendors around sustainability as another important area. Vendor performance management can also play an important role here.
Among its recommendations for retailers and vendors is to "Develop a shared business case that clearly outlines the value creation [from collaboration] and how it will be shared. Identify areas of opportunity to improve service, cost, cash, revenue and margin while enhancing the consumer experience.'

However, Gartner cautions that companies must commit the required human resource and technology investments to support the collaboration, else the best intentions likely will not deliver the desired results.


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