A truly efficient supply chain is the holy grail of retailing. It’s difficult in any business, but even more so in retail, given the thousands of suppliers and hundreds of thousands of products entwined within it.

As all retailers know, even minor tweaks can bring about significant improvements to the bottom line, and retail supply chain teams spend their lives scrutinising where they are needed.

But – and it’s a big but – where many businesses fall down is that they have little or no idea what goes on on the supply side. Mention collaboration – that oft-repeated mantra – and many retailers will find it difficult to stifle their yawns. This is largely because everyone waxes lyrical about how important it is, yet real progress rarely materialises. Most conversations between retailers and suppliers revolve around negotiation and are not always harmonious. Co-operation requires a massive shift in mindset.

It’s time, however, that both parties woke up. Retailers need to work harder to persuade their suppliers that collaboration does not mean conversations will revolve round payment times, cost price and discounts. For everyone in the supply chain, the sustained cost savings that could be made through closer discussion are enormous. Curry’s and Samsung’s efforts to work together, for instance, have resulted in a 50 per cent reduction in sales forecasting errors.

There are certainly signs that some retailers, at least, are investing real time and effort into working more closely with their suppliers, rather than just paying lip service to the notion of collaboration. Retailers’ work with the Government-funded Envirowise programme is a case in point. The scheme relies on retailers working with their key suppliers to look at ways to make their supply chains greener – and it saves both sides money in the process.

As retail supply chains become increasingly complex, fuelled by factors such as e-commerce and global sourcing, improving efficiency becomes even more challenging. Where retailers have fallen down in the past has been an inability to look at the supply chain as the sum of its parts.

There is now recognition – signified by the influx of end-to-end logistics companies – that a more holistic approach is required. But this recognition needs to become more widespread. No one is suggesting that retailers and suppliers become the best of friends, but, without even some degree of collaboration, a lot of the good work that goes on to improve efficiencies and the customer experience may otherwise be futile.

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