In our work with retailers and marketplaces, we get to see how people are tackling the need to enable more suppliers with less resources. Because we have made so much progress reducing the amount of time and effort needed to onboard a supplier, our customers often end up onboarding five to ten times more suppliers than they were before we started working together.
It would be nice to think that having more suppliers simply meant more margins, but growing your supplier program aggressively can lead to bottlenecks in other areas.
These bottlenecks often stem from specialized disciplines not having had to focus on throughput historically because integration and onboarding were always the bottleneck. This includes the legal team that focuses on signing the right supplier agreements, the merchandising team that focuses on building the right catalog of products, or the IT team that focuses on supporting and maintaining integrations with relevant supplier software systems. These teams are important service functions when it comes to enabling suppliers, but they aren’t built to contribute towards the goals of supplier enablement.
To address this, we have started recommending that customers change the way they think about organizing teams in their business to fit a new function that leads to better outcomes for their supplier enablement efforts. We call this Trade Operations (TradeOps), and in this article, I’ll share our recommendations around why retailers should consider implementing a TradeOps program right now, roles in a TradeOps team, and metrics you can use to assess your TradeOps team’s performance.
We have developed these opinions through dozens of implementation projects and through our ongoing work with customers. We expect that because this is a nascent field, descriptions and definitions might vary, but the intent and scope of work is becoming more consistent.
TradeOps: a definition
TradeOps is a team focused on maximizing the throughput and supplier experience inside of a supplier enablement machine. The purpose of TradeOps is to onboard the most customer-relevant suppliers at the highest rate with the best experience. This gives us a mission to orient ourselves around.
In comparison to the existing definitions used in major retail environments (e.g. buyers on the merchandising side, IT ops on the technical side, and digital business unit owners on the commercial side), TradeOps merges the nature of those roles together, and focuses on the overall effectiveness of a supplier enablement program. In particular, reducing the time for suppliers to get value, and increasing the supplier throughput, while holding constant or improving the experience that suppliers have, would be the way TradeOps is evaluated.
The benefit of thinking in terms of a TradeOps function where it relates to supplier enablement is that it focuses entirely on suppliers. Assumptions about supply models (e.g. dropship, wholesale, supply chain contracting, marketplace) fall away. Those are ultimately ways of engaging with customers, rather than suppliers. The focus of the TradeOps team always remains on suppliers.
TradeOps: why now?
The need to increase the throughput of supplier onboarding and improve the experience of onboarding and ongoing engagement with suppliers is clear. Retailers that have historically had pricing power and market power are finding that suppliers have an increasing number of channels through which they can grow their business. The alternative is no longer just other retailers, but online marketplaces, direct to consumer paid marketing and more. The need to onboard suppliers quickly, and for them to have a good experience in the process, is critical.
Supply chain disruption and intense competition combined mean that retailers and marketplaces need to establish a unique voice that is reflected in a specific customer promise. To fulfill that promise, you’ll need the partnership of many great suppliers. As the world changes how it is trading with each other in fundamental ways, being able to rapidly establish a new category and keep your catalog fresh and differentiated will enable your business to thrive in all weather. It really is about agility to change things when you need to do so. Many retailers let their supplier experience suffer in hard times but it’s exactly what is needed to win.
TradeOps scope of work and key roles
In order to understand how a team should function, you have to understand its mission, its scope of work, and how it will be measured (metrics and KPIs that give you a sense of impact and effectiveness). In this section we’ll cover what we believe are the healthiest and highest functioning roles in a TradeOps team, and then under that what metrics and KPIs you can use to assess the effectiveness and impact of the team.
TradeOps scope of work
TradeOps team responsibilities emerge from the team’s mission — onboarding the most customer-relevant suppliers at the highest rate with the best experience. Here’s how that breaks down as a scope of work:
1. Troubleshooting issues related to supplier onboarding
No supplier onboarding process is perfect. If a supplier is running into technical, legal, or process-related roadblocks in onboarding, the TradeOps team is tasked with removing those roadblocks and clearing the path.
Any issues relating to supplier onboarding could be tracked in TradeOps Issues. Typically, you’d want some redundancy (reduce the bus factor) so you’d want to be able to assign the Issues to the appropriate member of the TradeOps team for follow-up and resolution.
2. Find opportunities for automation to increase onboarding efficiency
TradeOps teams are constantly looking to make each onboarding step more efficient. Whether it’s getting contracts signed or syncing products and price lists between brands and retailers, there’s always room to make things move faster. At Convictional, we’ve designed multiple tools to help automate the onboarding experience. One tool is Actions, where TradeOps teams can create custom onboarding flows for suppliers based on what they require. This reduces the need to create a new onboarding process for each supplier added to a store.
3. Setting Service Level Expectations for suppliers and measuring against them
TradeOps teams should hold the needs of both retailers and suppliers in harmony. Service Level Expectations makes sure both parties are on the same page and gives TradeOps teams effective measures to evaluate a supplier’s performance.
SLEs can include expectations around shipping times, return rates, customer satisfaction scores and more. It also helps brands understand where they can improve to satisfy a retailer’s customers.
A TradeOps scope of work includes everything that relates to supplier onboarding, the experience they have and also the problem they run into, and what business effects and expectations follow from that. It is part providing support and education, part problem solving and part business role. You can then break those scopes down into individualized roles, based on areas that people typically specialize. These roles could be played by generalists or specialists. The goal is to have at least one person in each role at a given time.
You can separate the various work that needs to be done into the following roles:
- Fixer: a fixer’s job is to fix leaks in the supplier funnel and reduce supplier churn. In particular, anything preventing the valued outcomes from a technical perspective. This sometimes overlaps with IT, but the focus is on maximizing supplier funnel outcomes.
- Selector: someone has to choose the right products from the right suppliers to maintain the most customer relevant offering possible. That cycle is the responsibility of selectors. This sometimes overlaps with merchandising, but the focus is on freshness and differentiation in curation based on a well defined customer promise.
- Trader: this person handles the commercial relationship with the supplier and oversees the onboarding funnel, primarily thinking about throughput and experience. This sometimes shows up as ecommerce ops or growth, but we believe the key is to make someone responsible for the program as a whole and the business outcomes within it.
Team structures don’t always have to be organized in the exact same way. People can matrix into these roles from their existing function. Alternatively, you could choose to have a single VP of Supplier Enablement responsible for the overall program, with a pod of each type of role (fixers, selectors and traders) reporting to that person. We think that is likely to lead to the best outcomes for this program, but it isn’t necessarily a requirement to have a matrix organization. .
Metrics and assessment in TradeOps
Once roles are established, the question becomes how to assess the effectiveness and impact of each role. Whether it’s several teams or a single pod, assessment is critical to making sure the right impact is happening and expectations for outcomes are aligned among everyone.
We recommend that TradeOps teams primarily use the following metrics:
- Net Merchandise Value (NMV): the net value of merchandise flowing through the machine (higher is better)
- Supplier onboarding time: how fast suppliers go from invite to first order (lower is better)
- Supplier experience: Satisfaction or Promoter score for suppliers (higher is better)
- Supplier throughput: the number of suppliers onboarded in a period (higher is better)
Each of these metrics can be bound to a particular period of time. In the case of NMV dollars, the shorter the better (e.g. assess every week). In the case of onboarding, experience and throughput, it may be better to assess every two to four weeks with a goal to improve it each time. Continuous improvement is easier when metrics are defined by their valence (e.g. higher is better) than when they are defined in ways that make the desired outcome less clear.
Give your TradeOps team the right tools with Convictional
We believe that the need to accelerate the time to value for suppliers and for your own business is going to increase, and that embracing TradeOps is the best way to make the future a bright one in which you can not only compete but maintain pricing power and win the market.
Here’s a cheat sheet for you to get started with TradeOps:
- Start by defining your customer promise, then consider what the inventory risks involved in fulfilling that customer promise.
- Once you have considered the risks, build a supplier enablement program that is run by a VP of Supplier Enablement who has a singular mission to maximize the effectiveness and impact of the program.
- Give that person the team of fixers, selectors and traders that they need to have impact, and assess them against the net merchandise value (in dollars) as well as supplier onboarding time, experience and throughput.
One way you can make it easier for your TradeOps team to execute under their mandate is to give them a tool designed for them. At Convictional, we provide solutions in our product that map well to a team organized around a supplier enablement program.
TradeOps Issues provides your team with what they need to know about every order that goes through to your suppliers, including continuous monitoring of supplier integrations to ensure that data is flowing smoothly.
TradeOps Product Validation allows your team to define requirements for product data. This feature ensures your suppliers provide standard data sets to you so that your customer experience remains consistent.
We have many more TradeOps features coming soon, so if you’d like to get a demo of Convictional and see how it can help you accelerate your supplier enablement program, contact our sales team today!