Asda’s Price
Asda, they’re a tough bunch. They want continuous improvement from their suppliers. They want their new stores and extensions open before time, and under budget. They buy 4 per cent of the total manufacturing output of China. OK, that last stat is about the American parent, Walmart, but nevertheless, it’s a good one.
Still, Asda, they’re a tough customer, right? Well, maybe not. They’ve just joined the Construction Products Association (CN 19/11/09).
Paying out for membership of a downstream supply-chain organisation isn’t characteristic of a typical hard-nosed client. Why have they done it? The CPA say Asda are “keen to understand the value they can obtain from a closer relationship” with the manufacturers of construction products. This is surely the action of a client keen to realise value through closer collaboration?
For Asda, the “value” will usually be expressed in pounds, shillings and pence. Suppliers of major grocery multiples will tell you terrible stories of being forced to pay for marketing campaigns, shoplifting losses, new store furniture and so on. They will tell you how difficult these guys can be.
An un-named major supermarket group is reported to have organised a ‘supplier conference’ at which their 400 top suppliers’ CEO’s presence was “requested”, for which a £400 registration fee was payable, and at which suppliers were told of the requirement for them to dib in substantial sums of cash to remain suppliers. So yes, they can be hard-nosed. But the reality is that, like any other client, they want to make money, and they want their supply chain to help them. Don’t we all express “value” in pounds, shillings and pence?
Now, this kind of client-supply-chain engagement – joining the CPA - is to be applauded. Deep involvement with the supply chain is only going to benefit all those companies engaged in win-win style activity. Anyone who can get past the hard-nosed bit, and who is good enough to make a difference in the supply chain, can look forward to winning good work. Be good – win good work.
And the great news is that Asda are part of the World’s largest retailer. Where Walmart lead, then Tesco (no. 5 in the World), Sainsbury, M&S and the rest will probably follow. Get ready for some more members, CPA. Get ready to be engaged with, supply chains.
Ross Sturley is Principal of Chart Lane, and a Committee Member of CIMCIG, the Chartered Institute of Marketing Construction Industry Group, who’s conference on December 2nd explores the sort of marketing strategies that might bring success over the coming year.
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