When asked what we mean by ‘supplier engagement’ - which is still a relatively new concept in many own brand retailers - it is about better facilitating supply related processes or supplier related initiatives through better communication, better support and better transparency. This makes it more efficient for the own brand team and also more efficient for their suppliers. And the fact is, that most product related projects or initiatives for own brand can be considered ‘supplier related’ - because so much is dependent on the suppliers but coordinated by the brand owner – the own brand team.
A great example of this process was our work with Walmart on their sustainability initiative to reduce greenhouse gasses. Walmart identified that “90% of that opportunity is in the supply chain”, and therefore we worked with Walmart to collect information, share case studies and best practice and help them achieve that goal. In that case it resulted in becoming the Oracle Eco-Enterprise Innovation Award Winner. It worked through supplier engagement, and this methodology works the same for topic issues such as plastic reduction, or more topical with the recent release of the PHE report on sugar reduction, nutritional improvements.
It is a similar case for own brand that these nutritional objectives mean working closer with suppliers. All of these improvements come from the supplier to re-formulate or re-invent products to achieve the ambitious goals for sugar and calories reduction, as well as to maintain the process on salt reduction and health improvements more generally. S4RB work with retailers to help them consolidate information across hundreds of products and suppliers to report on their nutritional content, but supplier engagement goes beyond reporting.
We collate information from PLM (specification) systems, developers, suppliers and volume (unit sales) information. Successful engagement is about communication, support and transparency. Communication is about clear objectives, which are probably category, range or project specific. Making this information clear and accessible is key, such as a supplier self-help portal, FAQ and e-Learning.
But transparency goes even further. How do products perform? Be honest where the failings are and where the opportunities for improvement lie. One way of measuring product performance is to use KPI dashboards for developers and suppliers to visually see which products conform to retailer’s own brand policies. These dashboards provide the opportunity to also view products across ranges or categories and to analyse by department or health category. But the final piece in the puzzle is support. As one own brand supplier put it "tell me what good looks like [communication], tell me how I am doing [transparency] and tell me how to get better [support].". This final leg is essential to empower suppliers; to share information on new ingredients or development opportunities and compare cross-category.
If the focus is on price or time to market, then to review nutritional content late in a project is too late to effect major change. It should become part of the overall brief. The reporting and KPI comparisons allow informed decisions to be made early in the development process which can lead to innovative nutritional improvements without the need to always compromise on price, quality or time-to-market. With the right metrics, the right KPI mixed with the elements of communication, support and transparency developers, category champions and suppliers can work as ‘one team’ to deliver winning own brand products. But with the change dependent on the supply base even more so than our sustainability example, supplier engagement will be key.