Expert Column: Private Label Transparency Ups Productivity, Consumer Confidence

By now, most people know that collaboration is key to success in any line of business. This holds true in the private label industry where retailers, manufacturers and suppliers are constantly competing with premier brand names. In fact, in a recent Nielsen report, “The State of Private Label Around the World,” a Nielsen consultant says that a collaborative mindset is essential to compete in the private label space.

Trace One recently surveyed global private label executives across a variety of industries to determine how they collaborate and the impact it has on their business. Participants were asked about the tools they use to communicate and share information, as well as how collaboration and transparency impacts respondents’ businesses and what they consider to be major collaboration challenges in today’s private label industry.

According to the survey, though participants can see and feel the value of collaboration, they are still challenged in their ability to communicate effectively and in real-time by using PLM software designed to do so. In fact, an astounding number of people said they cannot identify or collaborate with their direct supplier network. About one in four respondents rated their collaboration as “fair” or “poor,” and 43 percent of respondents say they still use offline tools such as spreadsheets and the telephone as their primary form of communication. Offline tools often impede collaboration efforts because they cannot be updated in real-time across the supply chain and in various regions, and paperwork is easily misplaced and often difficult to share.

Trace One’s survey found that retailers, manufacturers and suppliers face several barriers to collaboration. Forty-four percent identified dealing with multiple technologies as their top collaboration challenge, and nearly half of respondents cited a lack of communication. Given that the survey found organizations to be most focused on cost control, it's not surprising that 41 percent of respondents reported that speed to market is another top challenge they face in reducing costs, private label development and management.

To succeed in the private label industry, organizations need to do more than just collaborate; they need to ensure that they have full transparency within the supply chain. Moreover, true collaboration isn’t about having the ability to “talk” to partners throughout the supply chain – it’s about having full visibility and access to all supply chain partner documentation, sourcing information and audits so that you can react to potential crises and establish high consumer confidence in the quality of your product.

While many private label stakeholders are continuing to identify areas of cost savings and the ROI of collaboration and transparency, there are multiple factors that illustrate the benefits of this real-time communication and supply chain visibility. According to Trace One’s survey, 81 percent of respondents said their organizations are more productive because of their ability to collaborate. Additionally, more than half of those surveyed attribute transparency to improved customer sales and loyalty, and 83 percent say that transparency impacts consumer confidence and buying behavior. The benefits to be gained from collaborative tools and the transparency that results from the use of those tools far outweigh the challenges and risks organizations face without that insight and partner connectivity.

For more information click here to see an infographic that illustrates the results of the survey.