Even with a strong global economy, consumers continue to stretch their budget. More times than not, retail customers opt for private label products, which often rise up to the quality standards of national brands, and in some cases even higher. A recent Nielsen report highlights that almost one in five retail dollars spent around the world, is spent on a private label. Moreover, the data shows that the social stigma of private label has virtually disappeared worldwide (Europe, North America and the APC region) thus, putting pressure on global private label product development. Collaboration between retailers and manufactures is essential in addressing the customers’ needs offering the right product at the right price and achieving a satisfying margin. However, back and forth emails, miscommunication, mismatched processes and quality issues are often at the forefront of private label product development miscues.
The three most common problems highlighted by retailers are:
Communication is poor and complex
Relationships between suppliers and retailers are still managed via emails, offline tools such as excel spreadsheets, PDF’s, word documents and product information trackers. Also, there are often 3rd parties which dramatically slow down the development and supply chain management software process, which require extensive supply chain management software collaboration that cause unnecessary time lapses and added costs. Stronger relationships between retailers and suppliers can result in clearer, more effective, frequent communication, between all parties involved in the private label PLM software process, which can drastically improve speed to market, resulting in a higher ROI.
Supplier compliance causes uncertainties
Being competitive in a saturated market can be difficult, retailers are under pressure to deliver high quality private label products at a reasonable price. That being said, retailers in today’s fast paced environment, often find themselves sourcing from and onboarding an ever growing list of new suppliers. Therefore, problems arise when buying, sourcing and merchandising teams have vague knowledge about the suppliers themselves. Exchanging compliance documents such as, audits and in-line inspection reports via emails, undermines operational efficiency and leaves internal retailer teams with the impossible tasks of keeping track and of up-to-date supplier information and factory reports.
Transactional workload impairs efficiency
Retailers and suppliers’ deal with very complex activities such as retail product lifecycle management, retail sourcing, quality, demand planning and inventory optimization. In the first phases of product development changes may occur frequently. Keeping retailers updated with the most recent updates could cause confusion if changes were exchanged through multiple emails. This sort of information sharing often leads to discrepancies during production and adds to the amount of costs and time involved in the project.
How do Today’s Retailers overcome the most common problems of Supplier Management?
With today’s growth in private label and higher margin expectations, retailers are looking to expand assortments, balance price and quality and outperform competition. New technologies in vendor management software offer a centralized platform that can cut employees’ efforts for collecting and managing suppliers’ data, quotations, tracking audits and certifications. Retail team can use their expertise purposefully and focus more on business at hand.
The answer to these adversities is a real-time, PLM software tool that is available to all teams that deal with private label development and suppliers. This system, will allow a more streamlined supplier onboarding process, production tracking and post order commitment tracking. Overall, supplier management software tools will help to collaborate with suppliers in a timely and highly accurate way. Retail organizations can bridge the communication gap between suppliers and themselves to optimize decisions that affect product development and speed-to-market.
With the improved visibility and an audit trail, the right vendor management software can expose inadequacies in supply chain and retailers can mitigate risks accordingly. When retailers and their suppliers communicate and collaborate in real-time, they can minimize constraints, reduce product recalls and, simultaneously, grow consumer confidence.