Retailers/Manufacturers: Try Some SC Collaboration

chains_quinn-dombrowskiHave you been to a mall lately? Does anyone even bother to go to the mall anymore?

?

Dan Gilmore, editor of SupplyChainDigest, addressed this problem in a recent First Thoughts column and he rightly concluded that the problem is more than simply the rise of e-commerce, though obviously it is a big factor.

“The retail world is obviously transforming dramatically before our eyes. Last year, there were some 6500 net store closings in the US. Projections are for similar numbers this year,” he writes. “What most frightens me is that all this is happening in good economic times. What the carnage is going to look like when the next recession finally hits I hate to ponder.”

Gilmore notes that Procter & Gamble has said prices for its products fell by 2% for the first three months this year. “That at the same time transportation and most other input costs are rising steadily. Not a pretty picture for the bottom line.”

Calls for greater collaboration between retailers and manufacturers have been around for some time but have gained traction only incrementally. SupplyChainDigest’s recent benchmark study on the state of retail-vendor supply chain relationships,  asked both retailers and vendors to rate the barriers to better collaboration.

There were some interesting results.

For example, trust levels and indeed general interest in collaboration were at best mediocre, according to the study, as were executive support and tools to enable collaboration. Meanwhile, retailer and vendor knowledge/skill in how to collaborate successfully scored fairly well in the study. Gilmore writes: “Both retailers and vendors rated their own ability to collaborate as a very low barrier, and the capabilities on the other side as a high barrier.”  Or in other words, “it’s not me, it’s you.”

This conundrum tells me at least a couple of things:

. And collaborative tools are not effectively employed. What’s needed is a large dose of Vested thinking, coupled with a battery of Compatibility and Trust Assessments for retailers, manufacturers and their supply chain partners.

Image: Chains by Quinn Dombrowski via Flickr CC

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