Brands and Retailers Must Partner with Suppliers on Innovation to Drive Business Efficiency

Brands and retailers are missing opportunities to improve their businesses, and are incurring unnecessary costs, by not seeking out their suppliers’ ideas and insights on product and process innovation.

They also risk missing important sustainability and carbon reduction goals by failing to  prioritize efficient, fair, and collaborative partnerships with their suppliers.

These are among the findings of the Better Buying Partnership IndexTM (BBPI), a new tool which examines buyer-supplier relationships through the lens of partnership quality. 

The BBPI enables suppliers to rate their buyers according to 12 subjective measures, with buyers categorized as either True Partners, Collaborators, or Detractors. The label of True Partner is only granted when a buyer has satisfied a particular measure all of the time. 

The findings reveal the pressure suppliers are under, with many buyers never, rarely or only sometimes providing suppliers with enough time, visibility, or financial information for fully compliant production. Suppliers reported a range of supply chain risks that buyers should pay attention to,

 including access to raw materials, material shortages and overdependence on a limited number of raw material suppliers. Other risks identified included missed opportunities due to poor forecasting and incomplete capacity utilization, the volatile shipping environment and increasing logistics complexity, unstable ordering practices, and mounting pricing pressure at multiple tiers of the supply chain.

Marsha Dickson, President and Co-Founder of Better Buying Institute, comments: 

“Brands and retailers are missing opportunities to reduce costs and increase efficiency by not partnering with and listening to their suppliers, and not fully seeing the contribution suppliers can make to the long-term success of the business.

“Unlocking that potential will require new ways of working with suppliers, practical changes such as regularly listening to, and discussing suppliers’ ideas, and a shift in how buyers view their suppliers - from expendable to important sources of innovation for long-term business success. 

“It’s also critical for buyers to start assessing their suppliers’ performance more holistically, focusing on sustainability indicators in addition to those related to price and deadlines. The BBPI is the ideal tool to support buyers to do this, and to embark on their supplier partnership journey.”

Brands and retailers who subscribe to the Better Buying Partnership IndexTM receive an Individual Score and Company Report, enabling them to benchmark their performance against the industry as a whole, and recommendations from their suppliers on how they can improve. For information, contact Leonie Abraham, VP of Business Development.

Notes to Editors:

The BBPI consists of 12 subjective questions on areas including operational efficiency and the management of key deadlines, forecasting visibility and the predictability of future orders, the fairness and integrity of financial practices, the efforts being made by buyers to partner with suppliers on improving sustainability, communication practices, and the buyer’s status as a customer of choice.

The BBPI uses Net Promoter type scoring (NPS) - a widely used market research metric to measure customer experience. Suppliers respond to the statements in the BBPI questionnaire using a 5-point scale ranging from “All of the time” (5), to “Never” (1). Using this scale, Better BuyingTM then classifies each response into one of three categories of partnership: True Partners, Collaborators, and Detractors.

A total of 679 ratings were received during the 2021 ratings cycle. One hundred buyers were rated, including 94 buyers in the Softgoods category and 6 in the Hardgoods category (buyers that sell product types other than apparel, footwear, and household textiles). 

Most ratings were for Softgoods buyers (519 ratings), while the remaining were for Hardgoods buyers (160 ratings). However, Hardgoods performed significantly better, achieving a higher percentage of True Partner ratings on all but two of the twelve measures, with 62% of brands rated as True Partners compared to 56% for Softgoods.

Buyers in multiple industries and at any point along their responsible purchasing practices journey can use the BBPI to gain a tangible understanding of how to strengthen their partnerships with suppliers at all tiers of their supply chains.