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Common Sense Collaboration

Collaboration promises much to the retail supply chain, and rightly so.  So why have results to date been spotty at best?  It’s largely a result of a lack of vision regarding the retail supply chain and not applying common sense to the collaborative process.

Retailers and their trading partners are beginning to understand they are not alone. The retail supply chain does not act as a series of islands – each independent entity working for its own purpose.  Rather, smart companies are beginning to understand that they are really working as part of one, completely integrated network that is designed (or should be) to deliver products to their end customers.

To enable that view requires new planning processes and enabling technologies.  In simple terms, the planning processes of all players in the retail supply chain need to be connected – much like the network is connected – to allow products to be planned to flow from production to consumption.  The result? Unprecedented visibility where all partners in the value chain can see all future network flows – for a long planning horizon (52 or more weeks say).  Visibility is the driver of productivity and top and bottom line improvements.

Visibility also enables improved collaboration. Since all partners in the value chain can see what’s expected to happen, collaboration is put on steroids. It’s a result of the information available – the quality, not the quantity.

In fact, I would argue that collaboration will become more important – there will just be less of it. No need to collaborate on the plethora of retail forecasts and planned orders, since these will be automatically translated into the requirements and product flows of all other trading partners.  Since everyone can see what’s planned the new mantra of collaboration is “silence is approval” – as a trading partner, unless you indicate otherwise, your ability to deliver is assumed.

Smart companies will collaborate only where they believe it is necessary and worthy of each partners time.  That could be on promotional forecasts, plans for new items, ideas and concepts about product flows, supply issues – in fact, collaboration will become the exception, not the norm.

Isn’t that kinda how a good marriage works? You certainly don’t collaborate on every decision you make. Otherwise, you’d go crazy and there would be no impact on the resulting decisions. No, you likely only collaborate on important things, where each of your input is required. And come to a decision you’re both comfortable with.

It makes sense in life and, as it turns out, in supply chain planning too.

Demand Clarity

Jeff Harrop and Mike Doherty are the founding partners of Demand Clarity Inc, which helps clients design and implement supply chain planning processes.They have worked with some of North America's largest retailers, distributors and CPG manufacturers. Together with Andre Martin they co-authored Flowcasting the Retail Supply Chain, a book that outlines a new approach for managing the retail supply chain (www.flowcastingbook.com).

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