UK Retailers today are experiencing numerous challenges – everything from Brexit to less customer spend in the last 5 years; the rise of on-line and particularly mobile retailing, the giants of Amazon but also smaller niche e-retailers with lower costs than traditional store-based retailers. It’s a top priority for retailers to reduce costs through the increased use of IT and employing fewer staff.
This will have an impact on their suppliers who will need to demonstrate how they are taking greater responsibility for product quality. It’s also an opportunity, however, for suppliers to rethink their use of IT systems to increase efficiency and control in order to lower the cost of demonstrating product compliance.
The Challenges for Suppliers:
Sourcing Information:
- How will you keep up-to-date with the changing quality requirements and regulations?
- Do you have a dependency on the buyer to tell you what’s required that also differ from retailer to retailer?
Many suppliers rely on their buyer to inform them of any regulation and requirement updates. This can be tricky if you supply to numerous retailers with different requirements. Test houses can also advise suppliers of the requirements and regulations for their products. Some suppliers have in-house experts, this is more tailored to suppliers who manage their testing in-house. Finally, suppliers also have the option of subscribing to 3rd party services which can provide them with a compliance library tailored for them and regular webinar training sessions.
Managing Information:
- How will you provide objective evidence to demonstrate you are managing product quality that meets the expectations of your buyers?
- What IT systems do you need in order to provide greater transparency about your products’ compliance and the integrity of your supply chains to all your buyers?
- How do you select the IT system that will provide greater buyer confidence?
There are two options for suppliers. Either the supplier needs to have an in-house IT system (requiring constant development and maintenance) OR the supplier can outsource to another company to help cost efficiently manage their product compliance.
Outcome:
With the ever-increasing demand for product compliance in the retail industry being pushed in to the hands of suppliers, the importance of being able to collect, keep up to date with and manage compliance related documentation has never been greater. This change will give a competitive advantage to those suppliers who realise this and act to improve their information sources and I.T management systems. Those who do not take on these new compliance responsibilities risk failing to be able to meet the expectations of buyers thereby damaging future sales opportunities.
~ Frank Miller, TRG Managing Director