Joining the supply chain gang pays dividends on both sides

A new collaborative approach to promotional planning boosted Tesco's sales of products of the brewer Coors by £2.85m in 2004 and is now being rolled out by more retailers and suppliers.

Speaking at the Efficient Consumer Response (ECR) Europe conference in Paris, Coors' customer relations controller Andrew Robinson said the collaboration, which was developed with grocery think-tank IGD, had got an additional 190,000 cases into store by improving deliveries from Tesco depots.

"Availability on promotions wasn't good. We were getting really late confirmation of promotions and our production schedule was inflexible. We'd had a pretty torrid summer in 2003 when the weather got hot and decided we ought to do something about it. Basically, we didn't understand each other's supply chain."

Teams at Tesco and Coors mapped out the supply chains and came up with simple rules of engagement for promotions, he said. "It didn't involve a big investment in fancy computer systems, just a joint forecast, owned by both sides, and a meeting one day into each promotion. This is the critical part, where we re-forecast if necessary and ramp production up or down on the basis of sales. This [second] forecast has proved to be 97% accurate."

Somerfield has seen a 51% improvement in forecasting accuracy from a similar initiative with Coca-Cola Enterprises. It was achieved by just "sitting down and mapping out the processes"

Head of supply chain change Chris Morden added: "We've got rid of the blame culture and our supply chain teams are talking to each other."