Wegmans Takes Supplier Relationships to Next Level

MICHAEL GARRY

RANCHO MIRAGE, Calif. — Wegmans Food Markets and several of its suppliers have been forging a closer marketing partnership that aims at joint planning, common goals and common ways of measuring progress, according to an executive from the company.

Marianne Timmons, vice president, supply chain and global business to business, Wegmans, described the new marketing relationship last week here at the Food Marketing Institute's Supply Chain Conference. The conference was held jointly with the Grocery Manufacturers Association's Information Systems/Logistics Distribution Conference.

The marketing relationship between Wegmans and a handful of its suppliers is based on a new trading-partner framework dubbed “New Ways of Working Together.” The framework, developed by the Global Commerce Initiative, Cologne, Germany, an international users group that applies GS1 standards, has been adopted by “dozens of companies throughout the world,” said Timmons.

“New Ways of Working Together” evolved out of an earlier initiative called the “New Generation Sales Call,” which was unveiled at this conference in Orlando a year ago by Danny Wegman, chief executive officer of Wegmans, based in Rochester, N.Y. Both approaches urge retailers and suppliers to engage in sales and marketing discussions with a common language and a focus on growing sales without such disruptions as invoice deductions and delivery delays.

“We have finite resources,” said Timmons. “If people have to do things like chase trucks and deal with discrepancies and deductions, they're not focused on improving our relationship with our suppliers.”

Wegmans is applying the framework with Coca-Cola, Kraft, Frito-Lay, Procter & Gamble and J.M. Smucker.

Ann Dozier, vice president, strategic industry initiatives, Coca-Cola, who also spoke at the conference, echoed Timmons in saying that the Atlanta-based beverage company also discovered that it was not taking advantage of opportunities to fully connect with retailers. “So we started aligning our vision with Wegmans.'”

One of the practices behind the new framework is matching up subject-matter experts at a retailer with their counterparts at a supplier — what are called “diamond” relationships. Timmons acknowledged that forming these relationships is “hard work,” but that “we're spending time now working internally to be a better business partner to our suppliers.”

In developing this capacity, Wegmans has learned that at suppliers like P&G, the marketing department “thinks a lot about the Weg-mans customer,” much like Wegmans' own marketing department, Timmons said. “Bringing them together has been magical for our organizations.”

Joint business planning between retailers and suppliers is another hallmark of “New Ways of Working Together.” Timmons said that Wegmans has been doing business planning for Coca-Cola products for years, but until now has not fully involved Coca-Cola itself. “We never made the final step of making the plan collaborative and understanding the common goals and common measures we're going to follow.”

As a result of planning jointly with Wegmans, Coca-Cola realized that it needed to complete its planning cycle and share pricing information before the beginning of the year. So it finished the job by October. “That may not sound like a big deal, but it was a tremendous value to us when it came to eliminating disruptions,” said Dozier.

Wegmans has assigned 12 of its merchants to work on joint business planning. J.M. Smucker, for example, will call on four of those merchants, Timmons said.

Item synchronization is another area of collaboration between Wegmans and Coca-Cola. “Wegmans allowed us to achieve 100% accuracy on our item information,” Dozier said. “When we started, we were 30% accurate on our [direct-store-delivery] items.”

Wegmans has worked with software giant Oracle on establishing Web-based access to information for its trading partners “so everyone is working with the same information,” said Timmons. Oracle also helped Wegmans come up with standard measures of performance, which revolve around consumer sales, operational efficiency, information accuracy and execution effectiveness.

At Coca-Cola, establishing common goals and measures “was a big breakthrough for us in understanding our business with Wegmans,” said Dozier.

Dozier noted that a group within Brussels-based GS1 called Trading Partner Performance Management (TPPM) is working on developing a standard performance scorecard for the industry.