This is not an equal world. And even the best partnerships are seldom cosy. But a tough environment doesn't mean it's less important for companies to form partnerships for mutual benefit.
We have some of the finest supply chains, but even some of them are leaking large sums of cash as a result of poor teamwork and communications. In many of the chains, the prize is more than the total margins of all parties put together. And this is at a time when we are all strapped for the investment needed for people, innovation and equipment.
At IGD, and in the Food Chain Centre, we've highlighted the commercial benefits of true collaboration. Have we sealed all of the leaks? Not yet, but we have been trying to with more than 300 companies over the past three years.
Take Dairy Crest. The Food Chain Centre worked with it to examine one of its chains end-to-end, from the 400 milk producers supplying its cheese-making plant in Cornwall, through to one of its retail customers. The project contributed to dairy farmers receiving a higher price for their milk, estimated at more than £2m per year.
As part of the project Dairy Crest formed a Supplier Association for its producers so they could share knowledge in a way they haven't done before. As a result, the cheese plant improved efficiency and quality including product handling and stock controls. A single forecast for the whole chain was worked out, the gains were shared and shoppers benefited.
IGD has also been helping retailers and suppliers to work together to improve on-shelf availability. The beer category is particularly prone to out-of-stocks during promotions, but Coors and Tesco developed an early warning system so they could react quickly to any problems. As a result, the availability of Coors beer at Tesco improved by six percentage points in retail sales.
Efficiency savings are just as valuable. IGD manages ECR UK, and some of the collaborative distribution work we have done recently identifies opportunities to reduce the impact of transportation.
A superb example is Eddie Stobart Limited and Coca-Cola Enterprises taking vehicles off the road. This iconic drinks brand and well-known logistics company have avoided travelling 500,000 miles with empty vehicles since March 2004. Better for the environment and the bottom line.
These collaboration projects are not just for the "big boys": we have seen success among companies of all sizes across meat, cereals, dairy and fresh produce, as well as a range of private and public sector companies.
A good Food Chain Centre example of savings comes from a smaller vegetable grower who, by working with suppliers and customers, identified improvements that lifted profitability for all parts of the chain.
One of the biggest gains resulted from reorganisation of staff in the pack house, leading to a huge saving of £80,000. The grower also increased its farm profit by 60%.
The projects outlined have led to big money and efficiency savings. It's all about doing things differently and doing a better job for the shopper. We found that it is often the simplest things that can make a big difference.
It's a tough environment, and trust is difficult to build, but the companies that are successful will be those who work collaboratively. Can you afford to ignore it?
Go to www.foodchaincentre.com or www.igd.com to learn more.
We have some of the finest supply chains, but even some of them are leaking large sums of cash as a result of poor teamwork and communications. In many of the chains, the prize is more than the total margins of all parties put together. And this is at a time when we are all strapped for the investment needed for people, innovation and equipment.
At IGD, and in the Food Chain Centre, we've highlighted the commercial benefits of true collaboration. Have we sealed all of the leaks? Not yet, but we have been trying to with more than 300 companies over the past three years.
Take Dairy Crest. The Food Chain Centre worked with it to examine one of its chains end-to-end, from the 400 milk producers supplying its cheese-making plant in Cornwall, through to one of its retail customers. The project contributed to dairy farmers receiving a higher price for their milk, estimated at more than £2m per year.
As part of the project Dairy Crest formed a Supplier Association for its producers so they could share knowledge in a way they haven't done before. As a result, the cheese plant improved efficiency and quality including product handling and stock controls. A single forecast for the whole chain was worked out, the gains were shared and shoppers benefited.
IGD has also been helping retailers and suppliers to work together to improve on-shelf availability. The beer category is particularly prone to out-of-stocks during promotions, but Coors and Tesco developed an early warning system so they could react quickly to any problems. As a result, the availability of Coors beer at Tesco improved by six percentage points in retail sales.
Efficiency savings are just as valuable. IGD manages ECR UK, and some of the collaborative distribution work we have done recently identifies opportunities to reduce the impact of transportation.
A superb example is Eddie Stobart Limited and Coca-Cola Enterprises taking vehicles off the road. This iconic drinks brand and well-known logistics company have avoided travelling 500,000 miles with empty vehicles since March 2004. Better for the environment and the bottom line.
These collaboration projects are not just for the "big boys": we have seen success among companies of all sizes across meat, cereals, dairy and fresh produce, as well as a range of private and public sector companies.
A good Food Chain Centre example of savings comes from a smaller vegetable grower who, by working with suppliers and customers, identified improvements that lifted profitability for all parts of the chain.
One of the biggest gains resulted from reorganisation of staff in the pack house, leading to a huge saving of £80,000. The grower also increased its farm profit by 60%.
The projects outlined have led to big money and efficiency savings. It's all about doing things differently and doing a better job for the shopper. We found that it is often the simplest things that can make a big difference.
It's a tough environment, and trust is difficult to build, but the companies that are successful will be those who work collaboratively. Can you afford to ignore it?
Go to www.foodchaincentre.com or www.igd.com to learn more.
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