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Retail Value Chain 101: Surveying Suppliers and Acting on Their Feedback

Posted By Administration, Thursday, February 8, 2018
Updated: Thursday, February 8, 2018


Many retailers want to hear from their trading partners in the merchandise supplier community. Retailers want to know what suppliers like and don't like. They want to know what suppliers need from retailers to improve performance. Retailers also want to know how they compare with other retailers. However, there's a big difference between casually asking for feedback during a random conversation and taking a disciplined approach to surveying suppliers on a regular basis.

Just like top-performing companies ask for feedback from customers in a strategic way, retailers can use supplier surveys to gain insights into people, process and system challenges, and drive continuous improvement. Surveys can also be constructed to help you better understand your company culture and business acumen. When you take the time to gather and act upon feedback from suppliers, you show your commitment to becoming a better, more collaborative trading partner.

Questions to Ask in a Supplier Survey
We recommend a supplier survey include objective questions based on measurable data and performance, as well as subjective questions that tell you how the supplier feels about you as a trading partner. Responses might fall into categories such as "strongly agree," "agree," "disagree," and "strongly disagree."

Examples of general survey questions about your retail organization include:

  • Does the retailer share metrics and scorecards?
  • Does the retailer work with you in the spirit of a long-term relationship?
  • Is the retailer a collaborative partner?
  • Is the retailer open to your viewpoint?
  • Does the retailer have an effective merchandising team?
  • Is the retailer's senior management accessible?
  • Does the retailer plan effectively for the short term (seasonal/annual) ?
  • Is the retailer willing to change?
  • Is the retailer organization a well-managed company?
  • Does the retailer have a long-term vision?
  • Is the retailer willing to take risks?
  • Does the retailer make decisions in a timely manner?
  • Does the retailer have an effective marketing and advertising team?

You can also ask questions that focus on specific areas of your company, such as store operations, e-commerce, merchant teams and supply chain. Examples of supply chain-specific questions might include:

  • Does the retailer provide clear expectations for vendor performance?
  • Does the retailer promptly return phone calls/emails?
  • Does the retailer provide an appropriate level of support?
  • Does the retailer transmit information on a timely basis?
  • Does the retailer provide adequate and timely feedback?
  • Does the retailer demonstrate creativity in addressing issues?
  • Does the retailer meet deadlines?
  • Does the retailer ensure data integrity?
  • Does the retailer have reasonable standards (lead times, on-time delivery, etc.)?
  • Does the retailer generate accurate forecasts?
  • Does the retailer have systems that are accessible?
  • Does the retailer have systems that are accurate?
  • Does the retailer have systems that are easy-to-use?

How to Make Supplier Surveys a Valuable Exercise
We recommend supplier surveys be conducted on a regular basis. By soliciting feedback twice per year, or at least once per year, you gain the ability to trend your own performance over time. Are responses getting better, staying the same, or getting worse? For example, after two years, you could generate a report like the one below and determine whether your efforts are producing the improvements your suppliers need:

One of the primary benefits of conducting supplier surveys is finding out how you compare with similar retailers that do business with your suppliers, particularly your largest and most important suppliers. The best way to acquire this information is by asking your suppliers.

If a retailer is struggling and seems to be headed in the wrong direction, recent history has shown us that suppliers will be less likely to support and invest in that retailer as a trading partner. Comparisons with other retailers would allow you to learn how suppliers rate your performance as shown in the graph below:

Senior management should own the process and recognize the value of identifying and addressing problems with the supplier community. This will ensure supplier participation and support. That doesn't mean you have to survey every supplier. Use the 80/20 rule and focus on the 20 percent of suppliers that represent 80 percent of your supplier community's value.

Most importantly, supplier surveys need to be anonymous. Suppliers need to know that you expect and value their honest, unfiltered responses. Without anonymity, suppliers will be more likely to hold back because they're worried about protecting their own interests and offending the retailer. Watered-down responses diminish the value of supplier surveys because they don't paint an accurate picture of the supplier's view of the retailer.

Using a third party to manage the solicitation, collection, and formatting of your survey is one way to address this concern. Responses, ratings, and comments would only be seen in the aggregate. This will show suppliers that you view these surveys as an important tool for improving performance and you're not just going through the motions.

You Gather Feedback from Suppliers. Now What?
If you learn about problems and weaknesses but you're not prepared to do anything about it, what's the point? Put yourself in the supplier's shoes. They've been responding to these surveys for three years, but nothing has changed. Frustration sets in, and you add friction to the relationship.

Internally, surveys are designed to help you learn from suppliers so you can become a better retailer, increase revenue, and create competitive advantages. Gathering information without converting that information into insights and acting upon those insights is a waste of time.

Supplier surveys must go hand-in-hand with a formal process for implementing necessary changes that address specific problems. Do people need to be trained? Does a business process need to be altered? Is there a system within your organization that isn't doing or isn't capable of doing what suppliers need it to do? The sensible way to move closer towards becoming a best-in-class retailer is to make changes that enable you to operate like other best-in-class retailers.

Retailers should approach supplier surveys as a strategic discipline and process. This process includes the collection and analysis of data in a way that protects each supplier's anonymity, followed by a path to action. This feedback, when carefully considered and acted upon, allows the retailer to improve and become a better trading partner.

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Tags:  Supplier Relationship Management  Survey 

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