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Can Retailers, Suppliers Defend Against The Supply Chain Catastrophe?

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Advantage Group USA provides enlightening answers to questions regarding how the supply chain crisis should be approached.

The supply chain issue in the U.S. is still wreaking havoc on suppliers, retailers and ultimately, consumers. The complex, interconnected web of systems has always been fragile, making its demise under recent events inevitable and predictable. The last few years brought us pandemic-driven worker shortages, inflation, rising transportation costs, massive changes in consumer demands and many more factors outside the control of suppliers and retailers.

How do you defend against the indefensible? On the surface, it may be easy to see why suppliers and retailers can’t mitigate issues that are really out of their control. However, there is one thing that both can control — the way they combat supply chain issues.

Richard Cunningham

Rich Cunningham, Advantage Group USA SVP, managing director, has more than 30 years of experience in CPG, having held leadership roles at Coca-Cola, UTZ Quality Foods and Wise Foods. Throughout his seasoned career, he has been instrumental in revitalizing brands by building relationships and trust with retailers to increase customer retention and brand relevance.

Cunningham also spearheaded developing, communicating and implementing effective sales growth strategies and category management for food and beverages to align with retailer goals. In this article, he discusses his thoughts on the state of the FMCG industry and the role retailers and suppliers should play to mitigate many of the problems affecting it today.

What’s the industry’s current state, and how is the supply chain crisis affecting it?

A few things are affecting the industry as a whole right now. We’re still dealing with supply chain issues and grappling with the effects of the record-breaking inflation. These issues are out of the industry’s control. Still, the one thing in their control to mitigate its impact and defend organizations is increased communication and collaboration with business partners.

Labor shortages also affect any business that involves a lot of in-person interaction, increasing the tactical workload. It’s exacerbating the issues that the supply chain is already experiencing, so that’s a major strain on B2B relationships in the FMCG industry. One of the major challenges is that the labor shortage has increased the “tactical” workload, and retailers have deprioritized strategic conversations and planning simply because they don’t have time. This is putting a strain on partnership overall.

Lastly, the spike in inflation affects everything – from the cost of labor to transport and materials. The tension between suppliers and retailers is building because they must determine who is shouldering the cost of price increases. From the supplier standpoint, many are seeing retailers be inflexible and expecting the supplier to take the bulk of the hit on this one.

Inflation also worsened the effects of the labor shortage, which further strained the supply chain. The interconnectedness of the global supply chain, not just the American supply chain, makes it such that if one thing is affected, everything is. The supply chain crisis is really hitting the industry hard and we’ll be hearing about this for some time. The impact of inflation is further hindering relationships as retailers have escalated their focus on the consumer and value.

How should these issues be addressed?

You must think of the consumer today. What do they want? How did their behavior change during the pandemic? Did this behavior remain? Retailers must think of convenience which has taken on additional meaning. After all, consumers still like the in-store discovery and browsing experience and prefer brick and mortar when needing something quickly. Retailers need to look to online and offline tactics to incorporate convenience into their models, while suppliers should prioritize agility so that they are equipped to respond to retailer demand.

Overall, to defend against these issues, organizations must build a relationship that creates a foundation for short, medium and long-term success. This requires a core commitment to listening and responding with empathy. It needs a more in-depth, unbiased understanding of your partner’s goals so that you can work toward your company’s objectives while seeing how helping your partner achieve their goals is a benefit to you. This is why Advantage Group International exists.

Tell us a bit more about Advantage Group International.

We provide the gift of feedback and, through insight, drive positive behavior change and business growth. In the world of fast-moving consumer goods, we act as an integral link between suppliers and retailers. Advantage Group uses data, feedback and strategy consulting to illuminate opportunities for mutual growth, strengthen relationships and provide invaluable insight. In more than 40 countries, Advantage creates better insight, better business and better lives.

As I said before, the supply chain crisis is a product of many things. We don’t have an antidote, nor do we claim to. But Advantage has tools that can certainly help people and organizations weather the undeniable impact of the supply chain crisis on companies around the world. By listening to your partners, we help you see inside their minds and become more understanding of their thoughts, motivations and action. Behind these organizations are people who have opinions and emotions.

Businesses cannot control many factors that affect them – almost no one can. But they can maintain their relationships with people and organizations.

What strategies can be employed to illuminate issues and recommend solutions?

At Advantage Group International, we offer two engagement programs to help you determine your issue, acquire insights and develop an action plan.

Advantage Report gives clients a benchmarked view of performance as rated by their business partners, providing them with valuable data regarding their business relationships’ strengths, weaknesses and opportunities. The program has grown to service over 40 markets across the globe because of our proven track record of suppliers and retailers using it to drive more meaningful business-to-business relationships. Advantage Report helps people and organizations work better together.

We are dedicated to continuous improvement, as such, Advantage Report is built to match the changing needs of our clients. As an example, clients of Advantage Report can now recalculate their results according to the insights they’re seeking to unveil. Sometimes, organizations have unique needs and require a different program from Advantage Report. This is where Advantage Custom Solutions comes in.

Advantage Custom Solutions offers tailor-made engagement programs to solve unique problems, navigate complexities and strengthen partnerships. It’s effective for businesses with specific feedback goals in mind who think they’ll benefit from a completely customized approach.

How do you maximize your results with Advantage Group International?

Advantage Group International works with you to strategize, support, refocus and realign. To maximize your results, you must take an active role and be an equal partner. Here are our recommendations:

Communicate internally with your team – You must ensure that all the key stakeholders within your business know and understand your Advantage Report results.

Develop a strategy – This should lead to building documents and systems that frame strategic communication practices, highlight how new workflow models will be introduced, and define what success looks like.

Align with your partner – Using your strategy as a framework, you should present your action plan to your partner to build trust and confidence and align on what you both must do for mutual success and growth.

Focus on your goals and evolve – This creates organizational and partnership alignment, ensuring that you are being guided by what you learned from the Advantage Report.

It’s also our responsibility to accommodate the changing business landscape and help retailers and suppliers respond effectively. To ensure that we’re giving our clients feedback, data and insights that reflect the world around them and their current concerns, we have updated and refined our critical competency set to help people and organizations more strategically navigate their relationships.

To learn more about how Advantage can support suppliers and retailers on their journey to defend against the supply chain catastrophe and more, contact us here.

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