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Supply Chain Management
The Shoprite Group believes that our success is closely linked to the success of our suppliers. Stronger suppliers means more secure supply chain, more efficient suppliers equate to cost savings that we can pass on to our customers. This understanding, coupled with our intention to always build long term relationships with our suppliers incentivise us to use the means we have to support our suppliers. The mechanisms through which we support our suppliers provide significant benefit to them, which in turn provides significant benefit to our Group.
Services to our suppliers
As the largest retailer in Africa, our Group has established processes and systems that can benefit our suppliers.
One of these is our food safety and quality department. This department is responsible for the safety and quality of food in all our stores, and we engage and collaborate with our suppliers to ensure all food items are safe and correctly labelled. To achieve this objective, our food safety department works closely with suppliers, providing them with clear food safety specifications and rules that set unambiguous expectations relating to food safety and labelling issues. This assistance helps suppliers to ensure compliance to food labeling regulations, and the requirements of the Consumer Protection Act.
Through our testing of products, we assist suppliers to identify products with genetically modified content to proactively ensure appropriate labeling in accordance with legislative requirements and developments.
Our food technologists also actively participate in industry forums, specifically with government organisations and technical committees to ensure that proposed regulations and inspections are done for the benefit of suppliers, retailers and consumers.
Globally food waste receives a lot of attention, and through our collaborative approach, we aim to reduce food waste in our value chain. To this end, we enter into joint programmes with our suppliers to reduce food waste.
The Shoprite Group collaborates with our suppliers to improve packaging by identifying potential weaknesses in the stability of packaging that could result in product damage, consider the design and material types to increase shelf life and thereby reduce food waste, increase recyclability of packaging materials and to increase the use of recycled content in packaging.
Our Freshmark division sources from local suppliers where possible and provide growing programmes to these producers. This enables producers to obtain finance for their farming activities and to plan their planting and growing seasons.
Freshmark also shares their technical expertise to the benefit of farmers and producers, actively providing assistance on any challenge experienced by their suppliers.
Suppliers to the Shoprite Group benefit directly from our centralised distribution system. It allows them access to a more efficient route to market than the costly traditional “direct-to-store” option where supplier vehicles drive extra mileage and waste time between individual store deliveries. Suppliers no longer need to tie-up their capital in expensive warehousing and vehicles that offer no financial return, instead, they can focus their financial resources on product development and production related aspects. Our investment in central distribution saved our suppliers approximately R132billion of which R40billion would have been spent on fuel alone.
The Shoprite Group further invested in a pool of returnable and recyclable plastic crates that reduce packaging costs and improve product protection during transportation.
Special support to our small and emerging suppliers
Our Group buys from a large number of suppliers and we value our small and emerging suppliers.
Homemade is for startup food manufacturers who have products such as confectionery and preserves to sell, but may not initially have the means or capacity to register as large scale suppliers. They can approach their local store manager who will place them in contact with the relevant buying team. These emerging suppliers will then be assisted with relevant minimum requirements and practical advice to get them listed as a supplier under the Homemade label if the product is deemed viable.
Our team of food technologists assists and advises small suppliers of legal compliance, food safety and quality requirements. Through our involvement these suppliers save costs while ensuring legal compliance. This helps to make their businesses more sustainable.