DALLAS -- While collaboration between food distributors and their suppliers is a much talked about and sought after goal, there remain "significant barriers" to its realization, according to Mark S. Hansen, chairman and chief executive officer, Fleming Cos., based here.
"All of us have unique and dedicated assets that sometimes get in the way of collaboration," such as collaborative planning, forecasting and replenishment, Hansen said at the Retail Systems 2002 Conference and Exposition in Chicago. "We have substantial legacy systems and the cost of abandoning those resources is mind-boggling, and we can't get past that hurdle."
Another issue is what Hansen termed the "CEO/CIO paradox." Chief executive officers and chief information officers, he said, aren't always "directly linked" in their vision of collaboration when it comes to "what to get done with technology and enablement."
Hansen also addressed what he called "underprepared buyers and sellers." Too often, he said, "The principal negotiators between our companies are dealing with merchandise and cost as the overwhelming part of the discussion," neglecting other aspects "of how the relationship is developed." He described the progress being made in this area as "glacial."
Hansen also urged flexibility in the supply chain with regard to store formats and inventory handling. "The days of a supply chain dedicated to a specific format are probably difficult to maintain."
In supplying merchandise to stores, Hansen said, distributors need to handle goods on a "situational basis, offering a dynamic, real-time solution that could include piece-pick, case-pick, flow-through and even direct-store shipments."
In concluding his remarks at the conference, which ran through June 27, Hansen pointed out the need to not just transfer cost in the supply chain but remove it. "Retailers transfer costs to manufacturers, but the question is how do you permanently replace activity and improve the supply chain."