Joint business planning has become a foundational component of category management and the interrelationship between retailers and suppliers. Yet, except for a handful of major suppliers and retailers who appear to be getting it right, the vast majority still have a long way to go before they realize the full benefits of joint planning. Recent industry surveys reveal that only 20% of suppliers believe that their strategic collaboration efforts have achieved significant impact and 80% say it has delivered only minimal to moderate results.
Most joint planning processes are still focused on near term tactical opportunities in an industry environment that strongly suggests the strategic alignment of business strategies and capabilities in a solutions oriented environment, with a focus on the shopper and the shopping experience is a must if both parties are to produce the desired results.
It’s time to move beyond conventional joint business planning, which is basically a shared process focused on the merchandising planning and performance cycle, and a process which may or may not lead to mutual benefit, to Collaborative Business Planning (CBP). The word collaborative better reflects a process where organizations work together to realize shared goals and mutual benefit. This process has been tested and proven to deliver the desired outcomes of retailer/supplier collaboration such as identification of new growth opportunities, activation of shopper insights and solutions, and the ability to capitalize on cost saving opportunities through better functional/operational alignment.
The following provides an overview of the five key building blocks of effective Collaborative Business Planning Process:
