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Change management for private brand retailers

With private brands increasingly becoming a strategic focus for retailers, another focus is investment in behind the scenes technology. Any new system has the potential to drastically impact internal operations and processes with the aim of boosting productivity, innovation, and collaboration with trading partners. This is an opportunity for retailers to improve the way innovation is executed to capitalize on commercial opportunities.

You just invested in new technology. Now what?

What can retailers do to maximize supplier adoption of new technology?

In order to utilize its full potential and limit disruption, a new technology must be integrated into a retailer’s current operating model and business processes, which includes supplier engagement.

Most retailers face similar challenges with adoption of new systems, such as adjustments in current processes to incorporate the new technology, winning over suppliers who will be the end users of the new solutions, training users, and monitoring progress of usage.

The inability of a retailer to transfer technical capabilities into commercial opportunities, due to lack of supplier adoption, stifles organizational change and value creation. A process to manage supplier adoption is required to achieve easy deployment and significant value, and manifest long-term success.

Supplier adoption is all about change and change management. To drive change, retailers need to communicate their vision, motivate change, develop support, and manage and sustain momentum with all suppliers.

How to develop the change management plan for suppliers

Effective change management can be conceptualized as a three-step process:

1. Suppliers are first prepared for change

2. Change is implemented

3. Change is monitored

Finally, when successful, the new supplier behavioral patterns become permanent.

Suppliers’ responses to change may range from resistance to compliance, through to becoming an enthusiastic supporter of the change. Be prepared to deal with the full range of reactions!

Here’s a simple outline to follow:

1. Prepare for change

2. Communicate the plan

3. Focus on supplier management

4. Drive formal training programs

5. Ensure end-user readiness

6. Underpin the process with continued communication updates (on the ‘what’ and they ‘why’)

7. Maintain support (FAQ, How-to guides) and a place to ask questions (which continues on beyond the change into business-as-usual)

8. Evaluate return on investment

Motivating and supporting suppliers through change management

Motivating and supporting change is all about your approach to providing information to suppliers about the reality of the change, and how you expect it to be accomplished.

When communicating the vision, the private brand team must clearly articulate goals to all suppliers. Your vision must be realistic and based on your strategic plan. Let key suppliers provide feedback into this vision.

Suppliers grow tired of the rhetoric of the "improvement of the month," and must believe that this change will make an improvement. Motivation is defined as any process or tool that can be used to create a desire by suppliers to improve performance to earn an award or to enhance the business process. Adopting the new technology becomes the means to improve performance.

Give your suppliers the opportunity to prepare for change by learning about what’s changing and what’s required. Preparation and training can help them transition more easily into required roles or transition out of the business should it become a necessity.

Develop the support they need to support change. Suppliers should have easy and real-time access via a support and self-help portal which should include:

1. Process changes and training

2. Information on how to access the system

3. Self-guided training materials such as step-by-step instructions

4. Performance KPIs

Communication is critical. Communicate often but limit communications to what's important.  Make sure suppliers know where to go for information. Quickly and honestly answer any questions that come up. Don’t make suppliers feel excluded from the adoption events. This creates an environment of fear, skepticism, and disillusion. Inevitably, motivation and productivity will take a hit until a shift in mindset occurs.

Managing and sustaining change management momentum

Sustaining efforts is the most difficult part of managing change in any organization. Similar to any other performance improvement exercise, there must be activities put in place to maintain momentum. This stage is the “Turning Point” and is vital for learning and acceptance. Lay good foundations for this stage by making sure everyone is well trained and given early opportunities to experience what the changes will bring. Don’t expect everyone to be 100% productive. Build in contingency time.

The bottom line is that the adoption of new technology and solutions will benefit everyone who has to interact with it. And if your private brands organization is following best practices by transparently explaining the benefits to suppliers and providing support,then there's nothing to fear and only progress to be gained.

Further reading: Seven top tips for creating an awesome supplier portal

Steven Howell

Steven Howell

Steven brings more than 30 years of global experience in retail, CPG manufacturing, consulting, and technology to the Private Brands Industry. He specializes in product lifecycle management process design, supply chain management, organization design, business process improvement, project management, and system design and implementation. Steven has worked with organizations in North and South America on Business Development, Sales, Organization structure, Business Process, Technology implementation, and supply chain issues by understanding their business needs and translating into process designs, requirements and solutions, building key business & organizational capabilities.

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