Supply chain expert stresses importance of negotiating with retail partners
The supply chain is a crucial part of retail management – an effective supply chain can make the difference between having inventory at the right time or missing out on crucial sales. Michael Noon, the executive vice president and chief operating officer at Yusen Logistics, told the National Retail Federation that now is the perfect time for retailers and their suppliers to hash out new terms for their contracts.
"Both parties need to continue the dialogue to help cover fluctuating costs," Noone explains. "This is especially important when it comes to fuel so that the cost exposure is not borne solely by the carrier. Both parties also need to work together to manage multi-year contracts and discuss rate changes to reflect not only market changes (rates going down) but also cost changes (that usually go up)."
Going forward, Noone expects collaboration and communication to be more important in supplier relationships. New technology will enable third-party suppliers to share information with each other, giving retail merchants more insight into how their inventory is being moved across the world.
Shipping container volume is already up this year so far, which could indicate a boost in confidence among retailers. With more volume, however, comes more complexity, which highlights the importance of having a better supplier relationship.