Working together in New Ways

Drug Store News recently interviewed Wegman’s Marianne Timmons and Coca-Cola’s Ann Dozier, vice president of collaborative customer capabilities of North America retail sales, and Andrew Dragonetti, account executive, to talk about how to implement the Global Commerce Initiative: New Ways of Working Together, a white paper that outlines a vision for how retailers and vendors do business.

Drug Store News: What have you done or plan to do to implement some of the key learnings from the New Ways of Working Together document at your company?

Marianne Timmons: New Ways of Working Together at Wegmans has taken the four pillars of New Ways—focus on the consumer, connect your common information, prepare your people and share supply chains—and we’ve approached five of our key suppliers on it. We had a conversation with them on those four pillars, as well as four best practices—aligning our resources in a diamond versus the butterfly organizational structure, sharing common goals and common measures, getting focused on the meaningful few business initiatives and then planning our business better.

We’ve asked our suppliers…what are the meaningful few things that we can focus on as partners that will…help us, most importantly, improve our customer service.

DrSN: A diamond versus butterfly organizational structure, can you explain that?

Timmons: In traditional retailer/supplier relationships, all communication has historically been funneled through the sales and buying functions. So, for example, if I had a problem with the quality of pallets coming into Wegmans from Coca-Cola, in the old days I would speak to our buyer, who would reach out to Andy, and then Andy would go back into his organization and find the right person. That was the case for anything that might come up, all the way from bad pallets to quality problems to financial accounting problems.

With the diamond, we believe in empowering the people across the different functional areas in each organization to handle the business, to handle the disruption, to work together on the topics that they’re the experts on, whether it’s IT, accounting, distribution; keep the experts aligned so sales and merchandising people aren’t fighting fires or dealing with disruptions that they really don’t need to understand.

DrSN: That sounds pretty intimidating—relinquishing control over what many would consider to be their key accounts.

Ann Dozier: Let me add to Marianne’s comments from the Coca-Cola perspective. We view New Ways of Working Together as a framework that allows us to move to the next level of collaboration with our retail partners. In order to do that, we need to focus our efforts on future growth and not past problems.… By aligning people in IT, in marketing, in finance and in supply chain, those people can work through the day-to-day operational issues of the business and report on those issues through agreed-upon measures.

DrSN: Is New Ways more appropriate for larger suppliers, or equally appropriate for small-tier or mid-tier companies?

Timmons: It’s appropriate for those suppliers who you want to be most closely aligned. Smuckers is a good example.… They were the first supplier we worked with. I think its more about what you’re trying to accomplish with your business partners than the size of the supplier. But we know we’re not going to be able to do this with everybody.… We’re thinking we’ll probably be able to do this with 20 or 25 suppliers when all is said and done.

DrSN: What are some of the strategic initiatives borne out of New Ways between Coke and Wegmans?

Andrew Dragonetti: We looked at a number of strategic initiatives for our engagement. Joint planning was one that’s really focused on category development opportunities essential to advancing the business…and to best satisfy consumers.

We also included item synchronization and data-accuracy—these processes really involve connecting our businesses electronically which helps to eliminate common disruptions to allow us to continue to focus on growing our sales.

In addition we added a few other initiatives to our engagement, including Shopper Segmented Merchandising. The focus with this initiative is to really analyze shopper data, focus on consumer needs, and based on those consumer needs, develop store specific shopper segmentation.

Another final strategic initiative was collaborative ordering. This was a test that we implemented where we shared data using a new tool to see if we can generate better orders for the stores so that we could be more customer focused as well.

DrSN: When you’re developing these strategic initiatives, is there any fear the vendor will implement those best practices with other trade partners?

Timmons: From a Wegmans perspective, we go into this making sure that our suppliers know that we will be very focused and we will keep confidences through the duration of the pilot, but everything that we do together, we intend to learn about and expand to the whole of our business.… It’s not about improving Coke or Wegmans specifically, it’s about doing that, yes, but more importantly impacting the bigger picture.

DrSN: Is there any trepidation in jumping into something like New Ways with both feet? If so, how do you overcome that?

Dozier: This has to start with a commitment to this framework from the top of the organization and the willingness to change. The one thing many think when they first look at the framework is, “Wow, this is really obvious.” Because when looking at the opportunities on the page, one could easily say, “I’m doing this and I’m doing that and I’m doing this as well, so what does this really bring to me and my relationship with my customer that’s different from what I do today?”

Well, in reality when we review the framework as partners, discuss our strategies and values, and openly identify opportunities, we learn a lot of things that we didn’t already know.