Monday, July 20, 2009

Most Supermarket chains have centralized purchasing to cut costs and drive profits. Another great idea, this saves millions of dollars of the cost of goods each year by cutting down on LTLs (Less Than Full Truck Loads) shipments and thus keeping a competitive edge

This however usually affects produce quality unless certain checks are put into place. By removing local buying offices from the warehouses and having the buyers sit in centralized offices, many buyers no longer see what is coming in on the trucks.

Often, the buyers are just too busy to get out of the office to visit the warehouses and stores to check produce quality. Instead trusting the PQ (Produce Quality) checker at the warehouse level who usually doesn't have any retail experience.

This is a big mistake it's so important that buyers visit the retail stores several times each week to discuss quality issues with the produce managers. This builds a great relationship between the wholesale and retail divisions where instead today, it is quite common to have friction and little trust.

For an outsider that doesn't understand this problem it's because most companies pay their purchasers and managers a base salary with a performance bonus. A purchaser's bonus can be put in jeopardy if there are too many produce claims and rejections, or the store refuses to order product because they don't like the quality of a particular item that week. The produce manager faces the dilemma of losing profit margins if the quality sucks, shortages, or forced distributions of bad product because the warehouse has too much inventory.

The biggest problem is hiring purchasers without retail experience. This would be the same as hiring a chef who hasn't gone to chef school. They don't know what consumers like. Usually purchasers are men and we all know women do the majority of the grocery shopping. I always support promoting from the retail ranks because these employees have a better understanding.

I recommend buyers visit the stores several times a week and have daily quality report emails from the retail produce managers to catch any issues that arise. After all this is produce and we all know how many problems we have on a daily basis.

Even the Doles, Delmontes, T&As, ship bad quality ocassionally. I've worked both as a national wholesale produce manager and as a national retail produce manager so I've experienced both sides of the coin. I decided to tie each division's bonus program together so they relied on each other. This increased productivity and solved so many of the problems we were having. It can be very draining spending time everyday putting out unnecessary fires. The two divisions needed that push and in the long term healthier bonuses were earned and better relationships were created.

As a national manager, I've fought many battles with old school managers that wouldn't budge in their methods. I was just a kid in my late 20's, and they in their 50's and 60's. Most had never spent a day working in a retail store and those that had, it had been in the 60's & 70's. It's so important to show respect and not belittle the people you disagree with. You are after all on the same team working towards the same goal. There are a lot of politics in the workplace, to survive you need to find the right method to get your programs in place.

Retail marketing has changed so much in the past 2 decades. Always remember that we don't know everything and everyday we can learn something new if we keep our minds open. Otherwise you become an old dog. IMAO! =)



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