Page 272 - Performance Leadership

Chapter 14 Supermarket Performance Network • 261

supplier point of view. One way to evolve the private label into a joint-
value relationship is to develop completely new products, exclusively
available under the private label, such as a line of low-calorie fresh
ready-made meals. In joint-value relationships, ideally there is no cus-
tomer/supplier relationship, but all stakeholders involved create a new
product or service that none of them could have created alone.

Building the Performance Network
Retail, despite the impact of the Internet and all forms of e-business,
is a very traditional industry. It is very product- and bulk-transaction ori-
ented. Supermarkets are used to being the spider in the web, and have
no problem displaying their power during price negotiations. However,
the variety of relationships is increasing, and a supermarket’s perform-
ance management needs to display that. Table 14.1 shows an overview
of reciprocal performance indicators between a supermarket and its
suppliers. In added-value or joint-value relationships, managing the
transactional elements of the relationship is still important. The

Table 14.1
Reciprocal Metrics in the Supermarket Performance Network

Transactional Relationship Added-Value Relationship Joint-Value Relationship
Supermarket Requirements from Supplier
Fast • Replenishment • Time to respond to • Time-to-market
frequency required changes new products
• Order-to- • Time for
replenishment wait intercompany
time decision-making
processes
Right • OTIF (on time, in • Percentage of first- • Market share
full) time-right • Brand preference
• Quality of transactions through
shipment, % integrated process
deliveries accepted • Fit of product in
• % orders accepted overall brand
first time experience
• Quality of
information on
ingredients
(continued)