Collaboration is good for business: retailers and manufacturers reap the benefits of working together – Editor’s Note
These days everyone wants to beat their competition, gain market share, win at all costs. Every now and then, though, it’s nice to see companies working together toward a common goal rather than beating each other over the head. That’s what this supplement is all about–getting along, playing nice, winning friends and influencing your supply chain partners.
Collaboration is probably an overused (and often misused) term in supply chain management, but in the retail and consumer packaged goods (CPG) industries, some forward-thinking companies have hit upon a practical and effective way for trade partners to work together. It’s called collaborative planning, forecasting and replenishment (CPFR), and it’s helping companies cut inventories and boost sales.
The concept is simple: A manufacturer and a retailer set some common goals, regularly compare their sales forecasts, sort out the exceptions, and then go on about their business. That doesn’t sound like much, but in the historically antagonistic retail market, this type of communication was unprecedented a decade ago.
Of course, it can be more complex than that. You may be collaborating with multiple partners, who are also collaborating with multiple partners. Companies can plan promotions together. You can automate the whole process with some fancy software.
There are some legitimate questions and concerns about this type of collaboration: Is it scaleable? How much time and money will it take? Can I trust my partners’ forecast? Do we have accurate product data to make this possible? Hopefully, you’ll find the answers to many of these questions in the pages that follow.
But whether you follow the CPFR model or not, it’s clear that well-planned collaboration provides a lot of hard-dollar benefits, in the form of lower inventory, reduced out-of-stocks, increased sales and a significant decrease in those angry, 11th hour emergency calls that usually result in painfully expensive expedited shipping.
If you don’t believe me, just read the stories that follow about how Welch’s, Ace Hardware, and others have benefitted from collaboration, not just in terms of sales and inventory, but by improving relations with their partners. If you’re easier to do business with, you’ll do more business.
The best part: all you need to get started is a telephone and a pencil. Maybe a cup of coffee. If you do it right, you’ll save money and sell more stuff. And then everybody wins.
COPYRIGHT 2003 Advanstar Communications, Inc.
COPYRIGHT 2003 Gale Group