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Trust AND Verify - Twin Pillars of Joint Business Planning 2.0

August 4, 2014
patrick-quigley's picture
By Patrick Quigley
SVP & Gen Mgr, Field Operations
Trust AND Verify

In June the National Association of Chain Drug Stores (NACDS) and The Partnering Group (TPG) released a new study focused on helping “retailers and suppliers establish joint business plans to align and optimize shared business goals.”

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Developed through interviews with senior merchandising executives from major retail and consumer goods companies, the report, titled “Creating Value Together,” is definitely worth a read.  You can download a free copy here.

I suggest people read the report in full themselves to get the whole story. However I do want to highlight one key takeaway.

President Reagan famously used the phrase “Trust But Verify” to sum up his view of the Soviet Union during arms talks in the ‘80s. When it comes to how retailers and suppliers work together around joint business planning (JBP), maybe the better phrase would be “Trust And Verify.”  NACDS and TPG more or less made this same point in their report.

They argue that one of the biggest challenges facing current JBP efforts is a lack of trust between retailers and suppliers as they work together to develop and execute business plans.  Divergent goals and persistent concerns that the other is holding back from true collaboration, leave both parties reluctant to truly trust one another and engage in open, genuine partnership.

Increasing the level of trust is job one.

At the same time, NACDS and TPG suggest that in order to fundamentally improve JBP, retailers and suppliers need to significantly improve both the business processes and analytics tied to their work together.

The two cornerstones of this “JBP 2.0” vision are shared analytics and an improved collaboration framework.
  1. In terms of analytics, retailers and suppliers need to base their JBP efforts on a common set of data and analytics to measure, plan, and execute.
  2. Both parties then need to use that data within a broader context of common team assignments, workflow tools, analytic views, simulations, and tracking measures so that everyone stays aligned around a shared set of goals, performance measures, and responsibilities.

NACDS and TPG’s argument is that by having a consistent fact-based framework in which to analyze business results, set goals and track performance, trading partners can not only bypass the time consuming “my data vs. your data” fight, but also build greater transparency and accountability into their work together.  Sounds like verification to me.

Then there is that magic word “and.” 

Here at Market6 I’ve seen first hand how trust and verification are intrinsically linked through our work helping Kroger and their suppliers use shared analytics to track sales and drive supply chain and merchandising execution.

What I’ve seen is that when trading partners use the same information to analyze their business together, set goals, and measure performance, everyone involved trusts the data more and (over time) one another. Confidence in the numbers fosters alignment between the retail merchant and the supplier account team. The conversation quickly focuses on potential strategies to drive tactics to achieve shared goals and the commitments of each party to bring about a mutually beneficial outcome.  Over time that process of genuine collaboration, based on shared analytics and a common business process framework, leads to a stronger partnership and better business results.

Verification leads to trust.  And trust leads to better decisions and better results.

Interested in learning more?  I encourage you to read the whole report and let me know what you think at david.gottlieb@market6.com

Category:  Joint Business Planning