In a recent interview with Inside FMCG Woolworths chief Brad Banducci said: “We’ve gone from being reactive […] to being much more collaborative and much more forward looking with suppliers”.
Woolworths has been working with PFD Fresh to Go and Pollen Consulting Group to harness savings in the end-to-end value chain.
Collaboration is key to improving the quality and value proposition for consumers, taking the time to identify these opportunities, let alone the complexities in navigating both businesses to implement changes, means they often take a back seat.
“We work in a sector where there is a history of difficult relationships, trust stops us from sharing important information, leading us back to our separate silos—and a guaranteed recipe for failed collaboration. Value chain collaboration needs to be more than a transaction or project, it should be a core value of each business involved,” Pollen Consulting Group CEO Paul Eastwood said.
Woolworths has been working hard to develop a process and way of working to ensure these opportunities can be realised. This project is being piloted by PFD Fresh to Go.
The first stage is an end-to-end analysis of the value chain; identifying hotspots to focus on, Pollen involved stakeholders across all levels in both businesses and challenged the status quo in both businesses.
This process was a revelation for some, as this session attendee reported:
“I never really understood the end-to-end model and the role I played within this, mapping the end-to-end value chain, not only identified opportunities but provided both businesses with a deeper understanding and quite possibly empathy for how each other works”.
Once completed, the process then involves digging into lots more detail to validate and prioritise potential improvements. Opportunities were categorised as either internal to supplier or retailer and collaborative.
The assembled team selected the key initiatives across distribution, packaging, Woolworths standards and instore waste to focus collaboration efforts, alongside improvements directly in each business.
A joint activity plan was developed, utilising expertise from both businesses and Pollen Consulting Group. The project has already made a significant improvements in a number of areas, most importantly how Woolworths and suppliers engage.
“Kept separate from the day-to-day conversations, we have established a way of working that breaks down the traditional wariness between supplier and retailer and focuses on the positive changes we can make in the category to provide the consumer with a better quality and improved value proposition, PFD Fresh to Go General Manager, Andrew Francis, said.
“With facilitation by Pollen, a number of improvement opportunities have been identified that might have otherwise been overlooked or dismissed. Roadblocks and bumps have been managed between the two businesses as one. The energy levels and commitment are clear to see in our team and Woolworths’, working together we have made quick decisions to trial new initiatives, without long-winded discussions.”
Woolworths is working hard to rollout this pilot to more suppliers and working with a third-party allows both businesses to feel the process is mediated. Pollen’s role in this has been described as both an “industry expert” and “Marriage counsellor” in the same sentence.
“We are keen to see relationships in the value chain to move from transactional to transformational, what PFD and Woolworth have achieved in the short term is testament to embracing a new way of working,” Eastwood said.
“What we have learnt is setting up sophisticated benefits sharing models on day one or for wholesale collaboration across the industry will not work. Developing principles, and having grown-up conversations on the aligned objectives of the category is the right way forward.”