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SPECIAL FOCUS
SPECIAL FOCUS

The innovation in logistics and technology will down to 24, resulting in improved freshness, increased customer
enable growers, suppliers and retailers to build faster satisfaction, and a 25 per cent reduction in shrink. The value created
and more flexible, precise and transparent supply by these benefits was shared equally between the retailer and the
supplier.
chains. But how will they achieve this and, what do
these players have to do to take advantage of this What is in it for the fruit and vegetable business?
opportunity? A lot, especially when it comes to products with very short shelf-life,
such as berries,certain mushrooms or salads, which will profit
In the past, the relationship between retailers and fresh produce significantly even from a slight reduction in turnover times. If
suppliers has often been confrontational, shaped by regular and collaborative approaches to better managing the fruit and vegetable
tough negotiations. Taking the opportunity to place one such supply chain is to work, several key steps need to be taken. Firstly,
relationship on a different footing, two businesses – a retailer and each partner needs to ensure the relevant capabilities are in place
a supplier – jointly developed a strategic partnership with the in terms of organization, processes and information technology.
objective of producing mutual benefits. Their hope was that this new, Secondly, it is essential to priorities the right collaboration partners,
collaborative effort would create additional value all along the supply as it means they can focus their efforts wherever they will have the
chain, with both partners benefiting. greatest impact. Thirdly, both partners must establish a world-class
Once the retailer and supplier had set aside their long tradition collaboration setup, ranging from the partnership’s clear objectives
of negotiation, they were able to start the process of building a to insightful data sharing mechanisms.
relationship based on trust. They set out on this journey by first A second approach to speeding up the supply chain is to reduce
ensuring full, end-to-end visibilitay across both partners’ businesses standing times: every moment that produce spends not moving
when it came to all of their supply chain activities. This enabled them towards the end consumer, it loses freshness. Reducing downtime
to work together to detect where the existing inefficiencies were during transportation by truck, rail or air would improve quality and
located, and then to systematically correct the root causes. freshness at point of sale. There are a number of challenges that
As a result, the retailer has reduced idle times in the ordering stand in the way of achieving this ambition, however. This is the case,
process by transmitting orders marginally earlier, so they can be for example, with regard to the main transport routes out of several
factored into the supplier’s earlier pick-and-pack iteration. Volume major producing countries, such as those in Iberia. While a reduction
forecasts are now being shared early in the process to bring forward in the standing time could in theory be realized by using autonomous
certain process steps. Regular formal and informal exchanges transport, at present no viable solution appears set to achieve this
between both partners have driven the alignment and information goal in the near term. These problems arise due to the hurdles
sharing to save time, as inefficiencies have been eliminated. currently presented by legislation, the lack of standardization across
These efforts have reduced the order lead time from 48 hours borders, and the low degree of interconnectedness between
competing companies.

Case Study:

Fresh Produce Supplier and

Retailer Collaboration

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