Finding Win-Win

Frozen and Refrigerated Buyer – What makes a good trading partner? Manufacturers can start by taking a more customized approach to each retailer.

Unlike those youth sports competitions where everyone gets a trophy, the grocery game often produces clear winners and losers. Thanks largely to consolidation that’s created increasingly powerful retailers, suppliers are the ones that usually take a licking. But so-called “partnerships” that keep one company on the verge of bankruptcy aren’t good for anyone — even retailer winners. In order to succeed in an increasingly competitive marketplace, they need strong partners that can help them get ahead.

In fact, says Ken Morris, principal at Boston-based Boston Retail Partners, when they make an initial pitch to a new buyer, smart manufacturers will focus more on the benefits of the business relationship and less on product attributes. “While making the product compel- ling to the retailer is important,” he explains, “it’s even more important to demonstrate how you can add value to the supermarket’s business or make their operations more efficient and easy.”

“Good suppliers share insights that help retailers improve product forecasts and make smarter decisions around purchase volumes,” says Morris. “They also help retailers minimize out-of- stocks with insights into delivery schedules, the impact of the manufacturer’s advertising and promotions calendar and enhanced forecasting data.” An extranet that enables efficient data sharing between retailers and manufacturers is an invaluable tool, he adds. And manufacturers would be smart to stay on top of RFID technology.

Already prevalent at the carton and pallet level, RFID will eventually move to item level as well, allowing real-time visibility of inventory, reports Morris. What better way for suppliers to help their retailer partners reduce labor costs and improve inventory planning?

Another increasingly important manufacturer role revolves around food safety. Recalls are costly not only in terms of dollars and cents but reputation, so more and more chains are looking for suppliers that have not only taken steps to prevent them in the first place but also have a well thought-out, immediate action plan in the event one is required.

“In addition to improving their own production and distribution processes,” continues Morris, “Manufacturers can help retailers by providing guidance on food safety practices and technology that can track products and monitor temperatures to ensure the cold chain isn’t broken.” Because no matter which company is at fault, a recall hurts both partners.

Read Full Article: Finding Win-Win (page 36-39)

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