Envirowise and the Co-operative Group point the way to adaptive, collaborative supply chain partnerships
London, 3rd October 2005: Research from Envirowise has found that the UK’s retailers are failing to develop effective supply chain relationships. The programme found that, whilst most retailers and wholesalers (91%) are in weekly contact with the supply chain, and see the value of effective supply chain management (94%), few are putting in place the collaborative programmes and processes that can underpin competitiveness and agility, particularly during tough economic times.
Indeed, most retailers and wholesalers pointed to a cost cutting response to economic pressure that is damaging to long-term relationships and competitiveness:
• 56% shop around for cheaper suppliers during hard times
• 53% push suppliers to cut prices
• 36% seek to reduce the number of suppliers they use
Dr Martin Gibson, director of Envirowise, commented: “These figures suggest that whilst retailers are in constant contact with their suppliers, they are not truly collaborating with them. It could be said that they are relying on left brain supply chain management, focusing their communication solely on logistics and process issues.”
By contrast, a select group of forward looking businesses are beginning to look at the kind of collaborative, adaptive supply chain relationships that can deliver real bottom line and competitive benefits, as well as a smooth running supply chain. This ‘right brain’ approach is being pioneered by a number of larger retailers working with Envirowise, for instance, the Co-operative Group.
Dr Gibson continued: “Both these organisations are involved in our Retail Therapy initiative. They have identified the benefit of taking a more creative approach to supply chain management – you might say they are developing right brain supply chains. We are helping them to do that by facilitating collaborative sessions with their suppliers and helping them to innovate.
“The aim is to find efficiencies and better ways to work together. Suppliers are under no obligation to disclose cost savings to their customer companies – this is about collaborating to create better, leaner and more competitive supply chains, not just cutting costs.”
Becky Toal, Environmental Programme Manager, for the Co-operative Group says, "We believe that as the environment is important to us, so it should be to our suppliers, and Retail Therapy has helped in getting this message across. I would recommend the programme to other businesses looking to achieve something similar.”
We have a large number of suppliers and this programme has really opened their eyes to potential cost savings. The environment is very important to us as a business, so it should be to our suppliers too."
“The Envirowise FastTrack visits* were a particularly valuable aspect of the programme, and these have contributed to several of our suppliers making substantial cost savings.”
Case Study
The Co-operative Group took part in Retail Therapy for the first time in 2004. Along with Co-op sites in Manchester, Bury and Northern Ireland, they saved more than £420,000. Working with suppliers the Group cut costs in the key areas of raw material use, water consumption, solid waste reduction and energy use.
Glasgow-based meat products manufacturer, Calder Millerfield, was invited to join the Retail Therapy programme by one of its biggest customers, the Co-operative Group.
As well as receiving a free, FastTrack visit from an Envirowise advisor, representatives from Calder Millerfield have attended a series of workshops with the Co-op and other members of the supply chain to share knowledge and best practice in specific areas such as packaging optimisation and improved process control.
Technical Director at Calder Millerfield, Cameron Kyle, says, "We are very keen to drive out any excess unnecessary packaging and we are committed to reducing waste and encouraging re-use wherever possible".
About Retail Therapy
Retail Therapy is a scheme set up by Envirowise in 2002 to help retailers work better with their supply chains. Envirowise works with host companies which invite their key suppliers to discuss how they can improve business efficiency particularly through minimising waste and maximising cost savings. The forum encourages and equips companies to work together and find solutions to problems, for example re-use of packaging and more efficient use of utilities. All companies involved are offered a free and confidential FastTrack visit from Envirowise to help identify potential savings.
The Retail Theraphy scheme helps businesses in the supply chain realise the importance of complying with legislation and how good relationships minimises the risk of a break in the supply.
Other host companies that have been involved in the scheme to date include:
• Boots
• Centre Parcs
• Safeway
To date it is estimated that the scheme has helped identify potential savings of £5.5 million.
About the research
Critical 2 carried out the research in September 2005, amongst retail and wholesale businesses employing between six and 250 people.
About Envirowise
Envirowise delivers a valuable programme of confidential advice to UK businesses. This advice enables businesses to improve profitability and reduce environmental impact.
Independent, practical and proven guidance is available through the Envirowise Advice Line, information resources and on site visits delivered by a national team of expert advisors. Each solution is driven by the specific needs of individual firms to genuinely improve their business practices, profitability and competitiveness. Since 1994, Envirowise has helped UK industry save over £1 billion.
The Envirowise programme is available to any UK business, completely free of charge. For more information visit www.envirowise.gov.uk or call 0800 585 794.
* Please note that different services are available in England, Ireland, Scotland and Wales – please contact our Advice Line on 0800 585 794 for more information on whether you are eligible for a site visit.