Operational excellence-supply-chain

Supply Chain Partners: In the same boat together

The relationship with suppliers has never been so important. The COVID lockdown exposed the dangers of weak supplier integration, whilst the move to remote digital communications highlighted the opportunities for technology applications across new supply chains.

Trust between some suppliers and retailers hit an all-time low as orders were cancelled and payments frozen. The repercussions of such actions will set back the industry, unless proactive action is taken to re-build relationships and increase safeguards for suppliers.

Retailers wishing to evolve supplier relations would do well to begin with opening new dialogues and taking measures to personalise individual relationships as far as possible.

The evolution of inventory

Evolving the ethical supply chain.

Customers no longer separate in their eyes the practices of the retailers they buy from, and the suppliers selected by the retailer. It is important for retailers to take an ever-more active role in the monitoring and implementation of human rights, employee conditions, and sustainable initiatives in those suppliers.

Bad practices, at home and abroad, will ultimately reflect poorly on the retailer. It is in their interests to establish a better understanding of their suppliers, through the development and application of supplier charters and impartial monitoring. These agreements must cover working practices and conditions, child labour, potential slave labour, payment, working hours, working environments, air & water pollution safeguards.

It should become normal practice for both suppliers and the retailers who use them, to take a more active role in the social and ecological issues of the areas around factories and the places where workers live. In the best cases, this can include housing, sanitation, healthcare, education and job security.

Evolving a better relationship will have a variety of commercial benefits from increased efficiency and reliability to a better collaboration on the quality of product sample standards and checking procedures, and the added-value of the final product.

Enriching product quality & consistency

The enrichment of relationships will also help to add genuine value to products through the consistent additions of high-quality adornments and embellishments, in the battle to produce non-generic products. The development of exclusive supplier relationships with formal safeguards on both sides would stimulate a richer exchange of ideas, deeper understanding of customers, worker cultures and skill-sets.

An important element in building trust is the fairer burden and spreading of costs, such as those involved in purchasing raw materials, and accessing specialist production skills. The relationship with manufacturers should be evolved further to include special and exclusive relationships with growers and the providers of raw materials. A spreading of cost responsibility, and a guarantee of consistent added-value product supply.

The COVID lockdown and the need for flexibility has also accelerated the development of relationships with local suppliers who can deliver shorter lead-times, as well as bespoke and responsive products. Local supplier physical adjacencies will also facilitate and inspire closer working relationships and collaborative working.

The evolution of inventory

Agile retail businesses are shifting the supply chain to support a major strategic and operational focus on new inventories. The traditional approach of producing an inventory which is then sold, as much as is possible, is being transformed into an approach where a partly, or fully, virtual inventory is showcased as much as possible, and then produced to order.

The enablers of the new processes are built around delaying final commitments to designs, styles, materials, colours and sizes until the latest possible moment.

Bespoke inventories use local suppliers and fast response times to refresh and replenish the assortment in shops with the most up-to-date sales data and analysis. Virtual inventories respond to individual requests and orders from the customer, whilst the advent of instant inventories will potentially put the production of the product directly into the hands of the customer.

Your ‘supply chain’ project…

If you want to start the ‘product supply chain strategy’ ball rolling, please get in touch. I would be happy to share with you some typical project templates, schedules, costs, and case studies.

Please get in touch to discuss further your particular needs.