According to a revealing research released by Envirowise, the UK’s small and medium-sized businesses are not successful in developing effective and workable supply chain relationships, most especially in the retail sector. It was discovered that 91% of retailers and their suppliers are in contact on a weekly basis, while 94% realise and see the value of effective supply chain management. But only a few of them are actually focused on actually trying to develop a collaborative relationship and programmes that can strengthen their stability and competitiveness especially during times when the economy is not doing good.
This was reinforced by the retailers themselves who have admitted to taking a “cost-cutting” response to economic pressures that can damage relationships with suppliers and threaten the long-term survival of small firms in the supply chain. It was also shown that: 56% look for cheaper suppliers during times of hardship; 53% ask suppliers to cut their prices, and; 36% looks into the possibility of cutting down the number of suppliers they use.
Envirowise experts have observed that even though retailers are constantly incontact with their suppliers they are not really collaborating with them. The group described it as “left brain” supply chain management, which focuses solely on logistics and process issues.
As a contrasting view, a number of forward-thinking businesses are looking at how to develop collaborative supply chain relationships that could deliver real “bottomline” benefits and smoother running supply chain while also assuring suppliers with a secure future with them.
Company formation and business solutions experts agree that retailers should develop a good relationship with suppliers on the outset and build a good supply chain management relationship with them as a way of future-proofing business growth.