New Trends in Collaboration

January 18, 2010 - The economy remains the year's biggest challenge, causing manufacturers and retailers to make do with less as revenues and margins decline. These are the exact times when collaboration is most critical.

 

During a Web seminar on Dec. 17, 2009, Simon Ellis, practice director, Supply Chain Strategies, IDC Manufacturing Insights, revealed findings from the 2009 Shared Strategy Report -- conducted in partnership with CGT, RIS News and IDC Retail Insights. Nick Andromidas, executive director of Sales, Sony Pictures Entertainment; John Wright, manager, Strategic Pricing & Business Intelligence, Goodyear Tire; and EJ Kenney, vice president, Consumer Sector, SAP, were on hand to provide real-world insight on some of the collaboration approaches that are most valuable in areas like sales & operations planning (S&OP), sustainability and private label.

 

Here are some highlights from the Web event:

 

-- How have economic conditions affected collaboration between retailers and manufacturers? The consensus among panelists was that it suffers in recessed times. While new collaborative initiatives are rarely launched, pushing forward with existing projects is imperative. "Collaboration is not just about becoming a good partner with the retailer, but is truly about getting more timely information on consumer and shopper behavior. Companies have pulled back somewhat, but they would be wise to redouble their efforts around collaboration because it benefits their enterprise in so many different ways," says SAP's Kenney. Wright explained why Goodyear -- which has continued the collaborative initiatives it had underway prior to the recession -- is a good example of how to succeed in the long term.

 

-- Extending S&OP to key customers, and even suppliers, is now becoming commonplace but requires an enhanced level of collaboration. "S&OP is even more critical in uncertain economic times," says Ellis. "In 2010, we expect to see companies push S&OP to be a more collaborative, forward-looking process that integrates the various planning horizons." Sony Pictures Entertainment has S&OP "SWAT" teams in place -- composed of members from different departments -- for major retail accounts. "We are trying to run tighter S&OP planning. Our focus is to achieve a competitive customer lead time," shared Andromidas. Meanwhile, Wright of Goodyear said that the company is pushing S&OP out to customers to gain better visibility into what is occurring in the marketplace via the collection of POS data.

 

-- IDC Manufacturing Insights is seeing a significant increase in interest in private label -- both from consumers and retailers. SAP's Kenney observed: "We're starting to see private label manufacturers invest in technologies to do a better job. Branded companies should take their game to the next level to differentiate from private label." Ellis pointed to innovation as the best way for manufacturers to compete. "That's one of the reasons we see PLM tools growing in interest for CG manufacturers," he said. Wright agreed, saying that new technology in the tire market -- such as tires with low-rolling resistance -- helped to change consumer attitudes about a product that was originally a grudge purchase.

 

-- You can't have a conversation these days without mentioning sustainability. Ellis asked the panelists if sustainability is part of the collaborative conversation with their suppliers and customers. Both Andromidas and Wright report a constant dialogue around sustainability between their companies and their retail accounts. "The key is finding elements that resound with customers," says Wright. Kenney jumped in to share a new trend: "We're seeing more and more focus beyond green and toward eliminating waste throughout the supply chain. The days are certainly coming when retailers are going to mandate some sustainability topics. Wal-Mart is leading the way. Companies need to not only measure and develop metrics to evaluate the sustainability of their company but get ahead of retailer mandates in this area."

 

Click here to listen to this on-demand web seminar in its entirety.

 

To download a copy of the 2009 Shared Strategy Report, click here.

 

Don't miss our upcoming web seminar, "Demand-Driven S&OP: Generate Free Cash Flow & Market Share Gains" on January 19, 2010. Register Now!