Collaborative Supplier Management: The Key to Beating Holiday Fever
The holiday season—and accompanying spike in product demand—is no longer confined to the end of the year. With holiday celebrations in at least eight months each year—from Valentine’s Day to Easter and the Fourth of July—and nearly every product category from candy to clothing and home furnishings affected, retailers need to fine-tune their e-commerce strategy to capitalize on consumers’ growing appetite for seasonal items.
The biggest challenge in this increasing focus on seasonal merchandise lies in the lifespan of these events. Retailers face short cycles as well as mounting pressure to reduce costs and minimize risk. These constraints—along with added emphasis on responsible sourcing, the disruption created by Amazon’s e-commerce operations, and the competitive pressure to innovate the supply chain—create a compelling need for supply chain teams to rethink how they engage, manage, and sustain supplier relationships.
The intensity of the seasonality-driven retail paradigm requires a shift from short, tactical models to strategic, collaborative models that emphasize the value logistics suppliers can deliver to the overall business.
Integrated technology platforms that bring innovation in spend analysis, sourcing, sourcing optimization, contract management, and supplier value management to bear on complex and critical categories can help teams get the answers they need to pressing questions such as:
- Who are we spending with? How much? Where are they located? What are the shipping transit times? What is their capacity?
- Are there other suppliers with whom we might engage to reduce risk?
- Which suppliers have worked with us on potential obstacles and ways to resolve them?
- Which suppliers repeatedly bring forth innovations that drive top-line growth or cost savings?
- Can supplier production keep pace and exhibit the flexibility needed to adapt to the fickle demands of today’s e-commerce consumers?
- Can suppliers deliver the products at a price point that results in purchased online shopping carts?
Savvy supply chain teams are then able to design and implement the sophisticated strategies necessary to navigate the vagaries of consumer demand, market conditions, and unexpected disruptions. Examples include:
- Using routing guides, developed through sourcing initiatives for carrier selection based on capacity, price, and performance to drive load tendering to the best value carriers.
- Identifying emerging lanes to ensure that freight pricing remains competitive even as the network changes.
- Working closely with carriers and internal stakeholders to minimize unnecessary expenditures driven by costly surprises that may drive a transit mode shift.
- Continuously improving data consistency to drive even more value from future sourcing initiatives.
By leveraging a collaborative approach to sourcing, and having a strategy in place for ongoing management and measurement of logistics and supply chain partners, supply chain teams can work together with their stakeholders to make the most of the holidays—every single one of them.