How Private Label Retailers Benefit from Supply Chain Collaboration

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How Private Label Retailers Benefit from Supply Chain Collaboration

By Michael Bromme - 10/13/2014
With increased interest in private label brands and the growing complexity of the global marketplace, it is challenging for retailers to manage the communications, certifications, ingredients and information stemming from their numerous, worldwide supply chain partners. Along with this intricate supply chain, retailers are also experiencing consumer demand for more information about where their products are coming from to ensure that goods are safe and properly sourced.
 
Collaboration among private label partners has never been more important, and recent research suggests that in addition to improving organization, communication, safety and compliance, better collaboration among private label stakeholders can also lead to improved production and cost efficiencies.
 
Last November, a survey of Fortune 1000 private label executives across a variety of industries asked how effectively they collaborate with supply chain partners and what online or offline tools they use to communicate and share information. Additionally, the survey explored how collaboration impacts the respondents' businesses and what they view as major collaboration challenges in today's private label industry. In total, 93% of respondents reported that their organization is more productive because of their ability to collaborate.
 
Results of the study also showed that 54% of private label partners are most focused on cost control, with 42% reporting that they are focused on improved consumer confidence and 40% on improved time to market. As the private label industry expands with more data in the supply chain, partners recognized that if they don't communicate effectively they may face increased risk. Therefore, it is increasingly important for organizations within the private label industry to implement collaborative, cloud-based tools to share real-time information, manage those risks and, simultaneously, grow consumer confidence.
 
Surprisingly, 69% of respondents reported that their organizations still use offline tools such as Excel documents and email to collaborate. A majority of these respondents rated their collaboration as "poor" or "fair." Cloud-based tools that enable partners to communicate in real-time support traceability, thereby ensuring compliance and food safety, avoiding crises and building customer loyalty. In fact, more than three-quarters of respondents said their customer adoption and loyalty improved last year, with 78% of those respondents attributing this improvement to better partner collaboration.
 
As traceability standards continue to evolve and consumers become more interested in where their food comes from, collaboration and transparency are even more critical to an organization's success. Collaboration can even affect the bottom line. According to the survey, 82% of respondents believe that better collaboration can offset costs associated with the industry's top market pressures such as the fluctuating or rising raw material prices, labor wages and fuel prices.
 
Collaboration is the key to helping private label retailers overcome these – and other – market challenges so that they can spend more time on the business at hand and less time on managing supply chain communications. Based on this research, cloud-based tools that are developed specifically for the product lifecycle management industry, which can enable real-time communication and the tracking of documentation like audits and certifications, can significantly boost collaboration – and provide many other value adds.
 
Michael Bromme is executive vice president of Trace One, a provider of product lifecycle management solutions for retailers' brands, manufacturers and suppliers.