Page 268 - Performance Leadership

Chapter | 14

SUPERMARKET

PERFORMANCE NETWORK

Recently I wanted to buy a very well-known soft drink in the
supermarket where I usually shop. Instead of bottles, there was a letter
hanging on the shelf. The letter explained that since the soft drink
producer had drastically increased the price of the product, the
supermarket decided to stop offering the product for the time being.
The note further advised buying a different brand.

Stakeholder Dynamics in Supermarkets
Supermarkets and general stores offer perishable and nonperishable
goods, and they focus on offering a wide variety of brands—in other words,
“one-stop-shopping.” Turnover speed needs to be very high; margins tend
to be low and are driven by optimizing the supply chain. Supply chains
in retail can be either plan-driven or event-driven. In plan-driven envi-
ronments, all parties plan distribution based on the availability of prod-
ucts, anticipated demand, and an optimized distribution plan. The
opposite approach is called event-driven. Based on buying patterns, new
products are ordered and distributed in a just-in-time fashion.
Supermarkets need to have an iron discipline in logistics and an
operational excellence strategy for their supply chain in order to com-
pete effectively on quality and cost. Many business functions are
involved, some may be outsourced and others belong to the super-
market’s organization. Individual supermarkets may be owned by

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