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For a retail company, purchasing and logistics are crucial functions


For a retail company, purchasing and logistics are crucial functions

Find here Enabling Procurement’s interview of Dieter Struye for VIB Magazine, April 2019

“In February 2018, Dieter Struye, previously General Manager at Brico and 2017’s Young Top Manager of the Year, took on the role of general director of non-food at the Colruyt Group. Now, a good year later, he talks about his experiences in the past year, how purchasing and logistics make the difference for him, and how Colruyt deals with values such as partnership and respect for the environment in a changed retail landscape.

The role of non-food in the Colruyt Group

Since his arrival and after getting to know the various aspects of the business, Dieter has focused on clarifying the role of non-food formats within the group. He sees similarities with the food part of the business, and also differences, especially with regards to the way the customer is approached, and is fully engaged in the implementation of that principle.

“My starting point was: “What is the role of non-food within the Colruyt Group system?” Or: “In what way is non-food different from food and how do we best tackle that specificity?” I define the specific role of non-food for Colruyt Group as offering assortments in which purchases are not repetitive. They do not automatically form part of the repetitive shopping trip that consumers undertake to meet their daily needs.

“In the non-repetitive categories, the consumer starts from the product that he or she wants to purchase.

That is why you must be present online, you must ensure your brand awareness in the category, you must be known as a specialist shop where the consumer can get the right assortment for a particular product. For example, the customer knows that he will find a full range at Dreambaby and there is a wide selection of products available. That is completely different from the image we have for our ‘food’ branch. There, the choice is primarily one for Colruyt as a Retail Concept and consumers will purchase what they find there to meet their needs.

“My vision is that the formats mainly continue to determine their own strategy – because that generates a lot of specific value. At the same time, they must work together in a pragmatic way. I see it as my role to turn that concept into reality.”

Purchasing and logistics at Colruyt non-food

As part of that plan, Dieter and his format management teams have defined the scope of what the non-food companies do together and what they do separately. Logistics and purchasing are a key part of the customer value proposition, and are therefore managed at format level.

“We also invest in our logistics network, which aims first and foremost to deliver to our stores and consumers smoothly. We do this in the most ecological way and using modern techniques. Things like blockchain are becoming increasingly interesting and we are investing heavily in data-driven policies. For example, we can see whether the cold chain has been respected based on sensors that check whether the container was opened in transit. This helps us live up to the quality guarantee that we offer our customers.

The purchasing policy is also managed 100% per format: the formats work independently of each other in terms of product range determination, trading and promotions. Synergies are mainly worked out between the responsible persons. So, each format can do what’s necessary for it’s positioning and have a clear profile of its own.”

Conclusion: at Colruyt, purchasing and logistics are crucial functions that add value, not only to optimize costs and to strive for operational perfection, but also to achieve the right positioning. This is what Dieter expects from his purchasing function: specialization, increasing competence, building relationships with partners and customers, helping more and more to understand how the customer thinks.

Doing business together

One of the core values ​​of the Colruyt Group company is the concept ‘Together’. This implies building lasting relationships with both customers and suppliers. Dieter sees this now as an important lever for the further development of formats, where e-commerce and discounters have reached a certain level of maturity.

“The question is: what does it mean to build a lasting relationship with a supplier and how does this enable us to also build a lasting relationship with the customer? We still believe absolutely in the physical Retail model and the value that suppliers add to it, although the model must of course be adjusted here and there. We are evolving more and more towards omnichannel, in which the choice lies with the customer, but where there is still a very important role for the physical store.

An important part of the added value that a retailer can offer its suppliers is the chance to build customer experiences together, something that is still limited online. The question to our suppliers and partners is: how do they help us and how can we help them? A wide range remains important, but the discussion about our competitiveness with online players must be a given. If a supplier intends to sell his 10 most important SKUs to online players and sets different requirements for a traditional retailer, who also has a different cost structure than online competitors, then it won’t work for us.”

Sustainable business

In the public debate and recently with the climate protests, it seems that the public has made the transition to a more environmentally conscious way of consuming.

“Sustainability translates into clear KPIs for us to exert our influence. This is reflected in the choices we make for our range, where we always start from today’s facts. It is easy to say that wooden toys are ecological, but whether that is really the case depends on several aspects, e.g. where does that wood come from? Who made the toy and where? How is it painted? You see, when you keep asking, it is not always obvious what the most sustainable choice is. Attention to sustainability and working conditions are not the same at every supplier and that must be reflected in our product choices.”

Colruyt itself also has to make decisions: “In the last mile of distribution to the consumer, we opt for the most sustainable model and these are currently our Colruyt non-food outlets – the customer almost always combines a visit with a shopping trip to the food.”

At Colruyt non-food, one does not immediately see a major shift towards consistent ecological consumption. Consumers are sensitive to the problem, but that’s not necessarily reflected in their consumption. The turning point has not yet been reached. What consumers do is punish companies in their consumption pattern if they find that there are no initiatives regarding ecology. That is the conclusion that Dieter is currently drawing.

“We also have to ask ourselves: who should take the lead in order to process that change? Government and companies can certainly boost the possibilities for consumers and stimulate them. We have decided not to offer non-sustainable charcoal and we are at the forefront of several other themes, such as those just discussed. That commitment comes from the top, it is something that Jef Colruyt personally supports. If it needs to go further, something which has been discussed lately in the public debate, we think that it must be the role of the government to take the lead. It can impose limits on all of us, which would speed up the process a lot more than each individual company taking initiatives itself.”

Finally, what makes the difference at Colruyt Group? “What really helps us is that we have a specific corporate culture here, in which entrepreneurship, human contact and the support of employees are central. Value-driven entrepreneurship is an authentic part of the way we work here, and that has been translated into our development goals.  The values ​​of the company are really lived here.””

You can find the original -Dutch- article by clicking HERE .