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Retailer collaboration: How manufacturers can unlock its full potential

Aug 15, 2024 • 7 min

Getting stakeholders within a single business on the same page is tough. Getting stakeholders across multiple businesses on the same page is often considerably more painful. 

The recent RELEX Supply Chain Collaboration Report notes that 87% of respondents at manufacturing and consumer goods companies overwhelmingly reported their wish for more collaboration with their retail partners. But despite the desire to improve, the current state of collaboration leaves much to be desired. Bandwidth issues limit communication, meetings remain infrequent, and important data stays siloed. 

Fortunately, the dream of better collaboration with retailers isn’t just a fantasy. Modern tech advancements have made it easier than ever for manufacturers and consumer goods companies to improve retailer collaboration using a smart, collaborative planning platform. Manufacturers and consumer goods companies that do invest in the right collaboration solution stand to gain a competitive advantage in an increasingly crowded market — and at a time when supply chain wins can be hard to come by.

What is retailer collaboration? 

Retailer collaboration is a strategic process where manufacturers and consumer goods companies share information with retailers to optimize their operations. This two-way exchange focuses on vital data such as demand forecasts, inventory levels, and point-of-sale (POS) data. The transparency gained from this practice ensures that both parties align their processes more effectively, enhancing supply chain efficiency. 

Manufacturers and consumer goods companies continuously face increased pressure to meet demand shifts with greater speed and accuracy, and traditional supply chain methods often can’t provide the necessary visibility and flexibility. Retailer collaboration enables companies to respond more effectively to market demands to reduce costs, improve efficiency, and maintain competitiveness in the face of supply chain uncertainty. 

5 benefits of effective retailer collaboration 

Retailer collaboration aligns retailers with their manufacturing and consumer goods suppliers while delivering operational advantages. Real-time data sharing and enhanced visibility help all parties respond more effectively to market demands and optimize their processes. Effective collaboration streamlines operations, minimizes stockouts, and ensures that resources are allocated more effectively throughout the supply chain, potentially driving significant cost savings. 

The key benefits of retailer collaboration include: 

  1. Access to shared POS data. Manufacturers can track product demand and promotions in real time, helping them better meet market needs. 
  2. Improved forecast and planning accuracy. Shared forecasts and business insights lead to more precise supply chain planning and production schedules. 
  3. Reduced manual effort. Automated data sharing reduces the need for manual entry and analysis, saving time and resources. 
  4. Enhanced supply chain visibility. Continuous updates on stock levels and lead times allow manufacturers to manage their operations more efficiently. 
  5. Higher customer satisfaction. Aligning with retailer needs ensures better order fulfillment and timely deliveries, which boost customer satisfaction. 

An equally compelling argument for manufacturers and consumer goods companies to improve collaboration with their retail customers is the cost of not doing so. Without real-time data sharing, manufacturers struggle to align production with actual demand and find themselves burdened with overproduction or stockouts. This lack of coordination increases operational costs, lengthens lead times, and diminishes customer satisfaction due to delays and unfulfilled orders.  

Such setbacks chip away competitive advantage over time, leaving companies unable to respond quickly and effectively to market shifts and continued disruptions. 

The 3 biggest retailer collaboration challenges

Every manufacturer and consumer goods company has unique roadblocks hindering better collaboration, and so does each of their customers. But the biggest obstructions to improved collaboration boil down to three issues: data headaches, labor costs, and a breakdown in communication.  

1. Data headaches 

The 2023 RELEX Supply Chain Collaboration Report reveals that 78% of surveyed manufacturers and consumer goods companies receive data from their supply chain partners. Yet many pointed out various issues surrounding data collection, especially concerning:  

Manufacturers and their retail customers don’t always use compatible tool stacks, rendering the data one organization shares unusable to the other.  And readable data is often expired or in too small a volume to be useful for manufacturers.  

Manufacturers and consumer goods companies also find themselves sifting manually through reams of data, only to find that what they received from customers wasn’t what they were looking for. The data most relevant to manufacturers includes:  

Data headaches are only made worse by these companies themselves. Many manufacturers and consumer goods companies complicate data sharing within their own organizations. Useful customer data that does make it through is often siloed, remaining hard to access to much of the broader organization. Only 26% of manufacturers believe the data customers share is easily accessible to everyone within the company.  

2. Labor issues 

Current collaborative processes remain highly manual, requiring manufacturers and consumer goods companies to create teams dedicated to customer communication. While these teams should theoretically enhance collaboration between organizations, workers instead often find their time consumed with more tedious tasks — chasing, collecting, analyzing, and even reformatting customer data. The team also wrangles the internal data they send to customers, leaving little time to plan or work toward process improvements.  

Manufacturers and consumer goods companies are highly cost-conscious amidst ongoing supply chain disruptions — and so are their wholesale and retail customers. 

The communication these teams provide to manufacturers and consumer goods companies provides immense value. But these companies are highly cost-conscious amidst ongoing supply chain disruptions — and so are their wholesale and retail customers. These businesses or their retail customers may find it difficult to invest in or expand their workforce specifically to improve retailer collaboration despite potential future cost savings.  

This situation is especially relevant for those companies across the globe struggling to hire, train, and retain their workforce.

3. Communication breakdown 

The establishment of a regular cadence of communication can be difficult for everyone in the current topsy-turvy supply chain climate. Many organizations find cannot plan as proactively as they’d like because they are stuck perpetually reacting to adversity, leading to a vicious cycle of diminished communication:   

  1. A retailer becomes too busy to collaborate with a manufacturer…  
  2. …which results in inaccurate demand forecasts for the manufacturer…  
  3. …which leads to supply shortages…  
  4. …causing the retailer to become too busy to collaborate with a manufacturer.  

Retailers and wholesalers don’t like surprises. Breakdowns in communication injure the trust between manufacturers and consumer goods companies and their downstream trading partners, which can limit their willingness to collaborate. This broken trust can make it difficult for manufacturers to achieve their strategic goals despite often sharing those goals with their retail customers.  

3 ways to improve retailer collaboration using a collaborative planning platform

One look at the issues preventing enhanced collaboration, and it’s easy to understand why manufacturers and consumer goods companies have struggled to make meaningful improvements to their processes. Internal data, labor, and communications issues are often hard to handle internally, and the complexity only compounds when manufacturers factor retail customers into the equation.    

But complex collaborative roadblocks don’t necessarily require complex solutions. The key to overcoming the seemingly impossible puzzle of retailer communication is also deceptively simple: adopting a collaborative planning platform.  

A collaborative planning platform like RELEX allows manufacturers and their retail customers to:  

1. Share better data more often with automation 

Collaborative planning platforms resolve issues with data collection and management in a single, elegant way: automation. These tools allow manufacturers and their retail customers the ability to automatically upload up-to-date data into the collaborative system for use by both parties. Data from various sources is unified within the platform and then “transformed” into a format that can be used in planning for both short- and long-term planning horizons.  

Planning platforms allow collaborators to share a wide variety of data sets, including: 

Automated sharing also addresses another critical issue facing manufacturers: labor costs. Companies who automate their data sharing using a planning platform free up their staff to perform value-adding tasks that computers can’t do, like proactively clarifying and communicating exceptions to downstream trading partners.  

2. Use actionable insights 

All that automated data sharing isn’t just for show. This data grants manufacturers and consumer goods companies greater visibility into customer and consumer demand, allowing them to act ahead of potential supply and demand imbalances.  

A collaborative solution like RELEX allows businesses to use demand sensing tactics to make necessary short-term forecast adjustments. Traditional forecasting involves creating forecasts using internal data like historical and reorder information. However, these forecasts don’t account for immediate demand changes caused by events like social media events or customer promotions.  

With RELEX software, demand sensing combines traditional data sets with customer data to allow planning platforms to better detect these sudden demand shifts and automatically adjust forecasts accordingly. Planning platforms capable of demand sensing help manufacturers and consumer goods companies identify misalignments between expected supply levels and forecasted demand.

Demand sensing allows planning platforms to better detect sudden demand shifts and automatically adjust forecasts accordingly.  

For instance, the platform may detect increased demand for a product affected negatively by a material shortage. Quick detection using up-to-date customer data could give the manufacturer enough time to increase production of a similar product as an acceptable substitution while the shortage persists.  

3. Strengthen manufacturer & retailer communication to align on strategy 

Manufacturers and their retail and wholesale customers share similar goals like reduced costs, fewer disruptions, and increased sales, so working together to achieve those goals benefits everyone involved. The best planning platforms come equipped with collaborative dashboards that grant collaborators greater visibility into potential issues so that disruptions can be dealt with proactively.  

For instance, RELEX enables manufacturers and their retail customers to align strategies in several essential ways:  

  1. Simultaneous viewing of the same up-to-date data. Planners from manufacturers and their retail customers alike can highlight potential bottlenecks and collaborate quickly on a solution using the platform itself instead of sending emails back and forth.  
  2. Communication of future events. Visibility into a customer’s upcoming promotions enables manufacturers to increase production for a particular good in anticipation of an expected increase in future demand.  
  3. Demand shaping. Manufacturers and their customers can collaborate on trade promotions, pricing changes, and more to influence consumer demand to better match their existing supply.  

These capabilities streamline the collaborative process for manufacturers and their downstream collaborators, minimizing the risk of costly communications and reducing an often frustrating process into something far more painless.  

Win more, together 

Collaborative relationships between manufacturers and retailers have certainly come with a fair amount of frustration on both sides, which could easily dissuade each party from working toward improvements. But investing in regular collaborative communication and the right technology to collect and share data can work wonders to smooth the way forward.  

Success ultimately depends upon the trust built when both parties clearly understand how their plans will impact one another. When retailers and manufacturers combine advanced technology with open communication, they can work together — and win together — to achieve the best outcome for the consumer.  

Enhance your collaboration with RELEX 

Written by

Annabel Becker

Senior Business Consultant

Michael Gylling

VP Product, Consumer Goods & Production

Samuli Tanninen

Head of Product Commercialization

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