Grocers must embrace bold, innovative ways to cut costs and grow at the same time. That was the main message from McKinsey & Company lead strategist, Sajal Kohli, during the recent FMI conference.
While, on the surface, the idea of cutting costs while attracting more customers as an independent grocer seems to be a conundrum, there is a solution that allows you to achieve both goals – improved supplier relationship management. Specifically, less transactional interaction, more strategic collaboration.
Getting Beyond a Transactional Relationship
If you’re still managing your supplier relationships via phone calls and emails, keep reading because the manual process you have in place is probably what’s keeping you from achieving your ultimate goal: becoming a modern grocer.
According to research based on more than 200 global retailers and suppliers, more than half said the biggest roadblock to collaboration was “a lack of trust and communication.” That usually comes from errors due to the manual procurement process (i.e., hearing something wrong over the phone, forgetting to update an order through email, losing the sticky note with order information).
To build trust and communication growing retailers must invest in the relationship. That can’t be done unless you upgrade how you’re communicating. You need to implement modern solutions that offer streamlined communication, transparency, and improved efficiencies for both buyers and suppliers.
Implementing Modern Collaboration Solutions
When it comes to finding the right modern solution for improved supplier relationship management, you need to understand what embracing collaboration really means.
According to Kohli, who leads McKinsey’s Global Retail and Consumer Packaged Goods Practices, embracing collaboration means grocers need to ask: “What partnerships can help us improve our total cost to serve while enabling fulfillment, flexibility, and rapid inventory deployment?”
In order to attain those partnerships, a growing grocer must invest in a digitized solution that prioritizes end-to-end visibility can enhance and expand and nurture your vendor network -- allowing you to adapt faster during the procurement process, which in turn, will help you grow your business.
Kohli talked about how, pre-COVID, the supply chain was seen as a transactional asset that offered the best price in the fastest time. While cost and time still are top of mind, the pandemic proved grocers also stressed the importance of having access to the right products to meet demand.
One solution is iTradeOrder, iTradeNetwork’s order management solution for growing grocers, which allows you to simplify the order management process. It also provides growing grocers access to new suppliers from an 8,000 member-strong network.
Modern solutions, like iTradeOrder, allow you to not only manage the order process, start to finish, through real-time communication with suppliers, but improve the collaboration with them as well, which will help you build stronger relationships that will, in turn, help you grow.
Reap the Benefits
While digitizing your procurement process with a solution like iTradeOrder has upfront costs, your return on investment will be well worth it. In fact, iTradeNetwork clients who migrated from a manual to a modern order management workflow have experienced an estimated annual cost savings of 50%.
There’s also the benefit of improved efficiency between buyers and suppliers. According to a Coresight Research report, 70% of retailers and 58% of suppliers say improved collaboration allowed for added responsiveness to market and shopper trends.
A faster, more cost-effective procurement process generated by better collaboration with suppliers also benefits your number one priority: your customers. At the end of the day, meeting customers’ needs and preferences is the only way to grow your business. Improving collaboration through modern solutions is the means to that end.
To learn more about how to improve collaboration through iTradeOrder, contact us today.