Lost opportunity: why supplier self-help can reduce risk, time and money

The phone rings.

The Technical Manager recognises the number and glances at the wall clock – these calls never take ‘just a minute’.

“Hi, it’s Mario. Just a quick question, it should only take a minute.”

Yeah, right…

“I was up all night finishing the label spec for the new line. I couldn’t find the updated category brand guidelines though, any chance you can send them over? It’s due this morning.”

A simple request, right? It may seem like it. But, it’s still taken time. It’s taken time while on the phone. It’s taken time to search for the guidelines. And what are the chances that Mario has further questions? Exactly, more time.

In fact, statistically, each call takes over five minutes from picking up the phone to completing the enquiry. And that’s if there is just one call. If Mario does have questions, you can expect another.

Mario won’t be the only one to call that week, that day, even that hour. The Private Brand Product and Technical Manager will answer hundreds of these calls. And it doesn’t just cost time.

For call centres, a benchmark cost to answer a call is £28 (US$42), when labour and overheads are considered. But, this isn’t a call centre. Product Managers and Technical Managers are skilled employees, and the cost of them spending all this time on the phone to hundreds of different Marios is actually much more.

Not only that, but what of the lost opportunity costs? The time spent on the phone to Mario is time spent not managing quality or compliance or developing new products. And that isn’t just the retailer, but the supplier too. The cost is in fact doubled, £28 for the retailer and £28 for the supplier – a cost of £56.

Although this cost might be hidden, the full cost to retail private brand teams is typically thousands a month – a six figure sum when calculated annually.

With such a high cost, why does Mario even ask?

Well, he isn’t going to simply guess. Or at least you hope he won’t!

But it can all be so much easier. For the retailer and the supplier. The principles of supplier self-help are all about providing the information Mario needs in an efficient and simple manner – a managed knowledge base. This knowledge base is not stagnant, but expands over time to fulfil the informational requirements of the supplier and delivers a ‘one truth’ consistent to the retailer’s brand guidelines and standards.

It saves time and money and every single question is answered online. As you know, unlike the Product Managers and Technical Managers, this means that Mario can access it 24/7 rather than having to pick up the phone during office hours, and reducing the risk that he will guess. Therefore, Mario could have completed the label spec the night before as he had planned and spent his morning more productively.

From the work we do with retailers both in Europe and in North America we know that many members of the private brand teams often spend one to two days every week responding to supplier queries; valuable time which can be used more productively if there is an alternative.

Using supplier self-help, and addressing the transfer of knowledge and information to suppliers, the investment not only offers six-figure returns, but also reduced risk. Reduced risk to compliance, reduced risk to product launches and reduced risk to quality.

Learn more about empowered suppliers and the value of self-help.

Tags: Supplier engagement

Alex Fitchett

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