Industry collaboration is about creating links, but until now those links haven’t been connected into a larger chain.
Enter Food Marketing Institute with its new Total Store Collaboration (TSC) initiative.
This ambitious effort aims to make collaboration more inclusive by expanding it to more categories and partners. It hopes to marshal the same kind of energy generated around a much-heralded industry effort from an earlier era.
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“There hasn’t been in the U.S. a broad-based, industry collaboration initiative since Efficient Consumer Response in the 1990s,” said Mark Baum, FMI’s SVP of industry relations, and chief collaboration officer. “This is the first such 21st century effort.”
Baum is spearheading this FMI cross-category undertaking that is an important part of the association’s strategic planning process.
FMI wants to build on the successful work of the Trading Partner Alliance, the existing retailer-supplier collaborative forum between FMI and Grocery Manufacturers Association. FMI’s idea is to leverage the current strengths of the TPA to support initiatives across the Total Store, according to a document that explains the concept.
This means it would be extended to segments such as fresh foods, private brands, general merchandise, health and beauty care and pharmacy.
“C-level executives told us that FMI does a really good job from a trading partner collaboration standpoint vertically with GMA,” Baum said. “But retailers worry about growth across all their categories, and we’re missing things like perishables and private brands.”
FMI has already begun partnership efforts by reaching out to trade associations focused on these segments. Baum noted that FMI in particular hopes the outreach attracts manufacturers across these categories for collaborative programs with the existing retailer base at FMI.
TSC is about “looking at the issues wall-to-wall, across all these categories, and then creating a parity-based infrastructure model to address those issues,” Baum said, bringing all parties to the table, including retailers, suppliers, wholesalers, distributors, service providers and industry associations.
The roadmap includes a governance model that creates a new body, The CEO Forum, whose members are chosen to accurately represent the relative importance of industry segments and categories. FMI is building a support infrastructure and committing dedicated resources.
TSC will incorporate retailers large and small, including independent operators, Baum said. Independents will have seats on the CEO Forum.
In addition, FMI has developed a technology platform, MarketLink, that Baum said is a “one-to-many online collaboration tool designed specifically to enhance trading partner collaboration and communications among manufacturers, suppliers and service providers with independent store operators and owners.
In explaining how TSC can build on current industry efforts, Baum pointed to the product recall effort known as Rapid Recall Exchange, which has been a major focus of the TPA.
That effort, he conceded, has faced challenges over the years, but is now gaining momentum as the preferred communication platform among trading partners. However, there’s a need to expand the focus beyond just the TPA constituency, because GMA members are only one segment of retailers’ total supplier base.
“So within Total Store Collaboration, we can go back through produce, meat, seafood, private brands and other categories, and bring these other companies to the table.”
That underscores the point that TSC is about leveraging existing TPA initiatives and targeting new ones that have a cross-category impact.
“One of those might be next-generation category management,” Baum said. “The industry invented category management in the 1990s, and now it’s how we do business, but tools, insights and amount of data have changed, so it’s time to rethink all that.”
Other opportunities FMI has identified include initiatives for product dating standardization, food industry risk management, and data and standards.
As part of its new efforts, FMI plans to engage more closely with some of the key functional areas of its members, including senior merchandising executives and senior store or retail operations executives, Baum said.
Scott Schnuck, chairman, Schnuck Markets, and co-chair, TPA, said the TSC model will enable FMI to play a bigger leadership role in the industry.
“It makes so much sense when you consider how important areas like fresh are to our success,” he said. “We need to have resources to help the other parts of our businesses.”
FMI is eyeing a three-year timetable for ramping up TSC, which starts with “delivering the first wins” in 2014. That phase involves reaching out to other associations, building the infrastructure, and achieving “one significant and tangible outcome” on a top-priority issue, which has yet to be identified, Baum said.
The focus for 2015 will be on building momentum, including selecting two to three top priorities. FMI looks to 2016 and beyond for “unlocking the full value.” In this phase, the entire TSC program, including industry verticals and working teams, will be gaining momentum and achieving bigger positive results.
The upcoming FMI Connect event, scheduled June 10-13 in Chicago, will be a forum for collaboration topics, including in education sessions, Baum said.
“Collaboration has always been important, but now we’re extending our reach and level of engagement to more manufacturers and categories than ever before,” he said.
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