Tesco and P&G are Voted Supply Chain's "Best in Class"

Filed in archive Best practice on February 27, 2006

A survey of supply chain players by food and grocery specialist IGD, shows that Tesco is considered to be the best-in-class retailer, while P&G is the most admired manufacturer.

According to Retail Bulletin, the survey showed the characteristics of a leading retailer to include: sales and profit growth; a strong customer focus; an integrated supply chain; a distinct business model, and strong collaborative relationships. Tesco is considered to be "one step ahead of its competitors", and other best-in-class retailers include Wal-Mart, aldi, Lidl and Ikea.

The characteristics of a leading manufacturer include innovation; effective brand management; speed to market; excellent customer management, and scale and agility of the supply chain. P&G is the most admired manufacturer for its "leading edge and scale", and other best-in-class manufacturers include Dell, Ferrero, Müller and Unilever.

"Managing International Supply Chains shows that up to 64% of IGD's international survey respondents believed supply chain to be of high strategic importance, and a key element in driving competitive advantage, organisational capabilities and business integration," says Darran Watkins, Senior Business Analyst, IGD. "Companies have started to challenge more traditional organisational structures, and to integrate logistics, sales and production functions across markets and geographies."

Managing the end-to-end supply chain can help drive efficiencies and reduce costs, by improving supply chain visibility and providing real-time information. IGD's survey shows that 60% of companies outsource their warehousing, while 70% of companies outsource their transport. "By using several different logistics providers, companies are driving efficiencies through contract and performance measurement harmonisation, and by reducing the number of operators used," says Mr Watkins.

Managing International Supply Chains shows that the top challenges are demand planning and forecasting (72%); retail packaging (54%), and new product introductions (54%), and that collaborative planning with the retail customer can help improve on-shelf availability and increase sales.

Finally, Managing International Supply Chains outlines the issues facing the industry going forward. The top projects for leading FMCG companies can be grouped into demand planning and forecasting; cost management; inventory management; customer service; production, warehousing and transport; availability and retail packaging, and data issues and IT improvements.

"It is clear that a leading service provider needs to be efficient and cost effective, innovative, provide great customer service and tailored solutions and, of course, sound operational delivery," concludes Mr Watkins. "Meeting these challenges is critical to success."