Estimated reading time: 3 minutes, 35 seconds

2012 year of Collaboration

CollaborationWe're starting to see year end results from 2011. Many look promising but others still show struggles. It seems, from  talking with Retailers and Grocers, that they plan to continue implementing the strategies they started mid-2011. As companies continue to look at ways to improve operations to offset lower sales, an area of growing interest is improved partner collaboration. What does that actually mean to collaborate?

According to Wikipedia :

Collaboration is working together to achieve a goal. It is a recursive process where two or more people or organizations work together to realize shared goals, (this is more than the intersection of common goals seen in co-operative ventures, but a deep, collective, determination to reach an identical objective)

So what does that mean between buyers and sellers? I'm seeing that there is a trend in companies sharing information that allows both parties to become better partners, make better/smarter decisions, and run their individual operations more efficiently. We have Retailers and Grocers now providing Point of Sale data to the suppliers not only to support a VMI program but for allowing the supplier to determine sales trends and forecast.

Point of Sale data has been provided to suppliers for quite a while, so why is this now becoming important? Suppliers have finally gotten the message across that where products are actually being sold to the end consumer allows them to assist their retail/Grocery customers with improving their selling. Knowing what and where products are ultimately sold is great information, however what is just as important is knowing what the retailers/grocer's are planning in the future by providing forecast data. Providing both of these data sets can improve on the suppliers' ability to be prepared for future orders.

I also see more and more suppliers willing to provide Inventory levels to their buying community, and in some cases allocate part of their on hand inventory to a Retailer or Grocer. Suppliers have been willing to provide this information with the E-Commerce Drop Ship model, however they had been reluctant to actually allocate products to a given customers. With a more collaborative approach, both parties are now willing to work with each other more closely and provide special treatment to their more cooperative partners.

With more and more of this type of data being shared, both parties have realized the value/benefit; to a point that Retailers and Grocers are requiring their supplier partners to support both the forecast and data feeds. This introduces a new problem; how does the supplier manage all of this data. Certainly, there are database tools available to manage this information like Cognos BI (Business Intelligence) however that is not the only option these days; there's the "Cloud".

Yes, storing data outside of your own walls is becoming more widely used, so in addition to just storing data for future retrieval, there are Software as a Service (SaaS} providers that also have tools for managing/reporting on this data. No more need for managing a multitude of Excel Spreadsheets and pivot tables but full browser based tools with pre-built dashboards. Forecast and POS data are  perfect examples of cloud based analytics that work well. However a growing area for Cloud based analytics are those Inventory updates that Ecommerce Retailers need.

I see two ways that a Drop Ship Retailer manages their suppliers' inventory information;

  1. either they receive and store and ping the database for inventory availability internally
  2. have personnel go online to each of their suppliers' websites to get available inventory as they have no way to manage the data.

With Cloud based solutions this data is now available from a single website for a multitude of partners. The evolution of this concept has started in specific industries. For example, lighting companies like provide lighting retailers that don't have a way to manage inventory levels in one central location, now have access to many suppliers' inventories using this one stop shopping concept.

If you're already using a data provider, perhaps now is the time to ask them if they have tools for managing multiple origins of data that support POS, Forecast information or have a tool for managing multiple partners' available inventory. If so, perhaps they can assist with more of your partners and gathering data for you as well.

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