As retailers face mounting pressure to do more with less, strong supplier partnerships are crucial for staying competitive. New research from SPS Commerce reveals key obstacles preventing effective collaboration, along with proven approaches to overcome them.
1. Communication gaps damage partnerships
The challenge: While 75% of organizations indicate that open communication is essential, many retailers struggle to maintain consistent dialogue with suppliers. Without regular updates, small issues can grow into major problems that affect the entire supply chain.
How to solve it:
- Use automated tools for routine supplier communication.
- Blend self-service tools with personalized outreach based on partnership requirements.
- Articulate your requirements and expectations.
- Document and communicate key decisions.
2. Goals don't align across organizations
The challenge: 73% of organizations struggle to create alignment around shared objectives and priorities. When retailers and suppliers pursue different objectives, both sides waste time and resources. One inventory manager noted that problems often arise when goals aren't well-defined or there are too many competing priorities.
How to solve it:
- Clearly share your business objectives.
- Focus more time on key supplier relationships.
- Agree on key performance metrics upfront.
- Track commitments and follow-ups.
- Check alignment in regular reviews.
- Create shared accountability for outcomes.
3. Data lives in too many places
The challenge: 76% of organizations report confusion and inefficiencies from fragmented data. Working from different data sets leads to inventory, order fulfillment and shipping problems. Without a unified source of truth, teams spend more time reconciling data than solving problems.
How to solve it:
- Create one source of truth for key supply chain metrics.
- Share inventory, order and shipping data in real time.
- Use integrated systems when possible.
- Automate routine tasks like tracking order status.
- Focus on giving teams the right information at the right time.
- Move quickly from identifying issues to finding solutions.
4. Decisions are made in silos
The challenge: 70% of organizations identify isolated decision-making as a major barrier. When retail teams make decisions without supplier input, it creates ripple effects throughout the supply chain.
How to solve it:
- Bring key suppliers into planning discussions.
- Share forecasts and promotion plans early.
- Hold cross-functional team meetings.
- Keep everyone updated on major decisions.
- Give teams time to focus on future initiatives.
5. Competitive mindsets get in the way
The challenge: 76% see competitive attitudes as a significant obstacle to collaboration. Nearly 80% of organizations say personal relationships are vital, but competitive attitudes block open partnership.
How to solve it:
- Focus on mutual benefits and shared success.
- Share challenges openly.
- Build personal connections with key contacts.
- Foster close working relationships at multiple levels with strategic suppliers.
Creating stronger partnerships
Research demonstrates that successful supply chain collaboration depends on multi-stakeholder engagement across brands, platforms and organizations. Although technology plays a critical role in automating routine tasks, the human element remains irreplaceable.
For retailers: Segment suppliers by importance to your business. Collaborate with suppliers using a combination of automated tools and personal engagement. This allows you to maintain strong connections across your supplier base while using resources efficiently.
For suppliers: Invest in technology systems that enable sharing of inventory, order and shipping data. Set up automated alerts for potential disruptions, establish digital communication channels and prepare for data-driven insights about improving joint operations.
Companies that address these collaboration barriers systematically spend less time on day-to-day problem solving and more time improving supply chain performance together.
Findings are based on research from SPS Commerce examining collaboration across retailers, suppliers and logistics providers.
