How Sainsbury’s Revitalized Their Chain of IT Suppliers

Few retailers have tackled the financial uncertainties of the digital era with the flourish of Sainsbury’s. In addition to streamlining its tech supplier roster by 70%, the U.K. retailer has saved tens of millions and improved customer-facing performance on the year’s busiest shopping days – while growing stronger bonds with the suppliers it mutually relies on.

On Origina’s podcast, “Two Irish Guys Discussing Software,” Sainsbury’s Director of Supplier Management Andy Nagalewski sat down with Origina CEO and Founder Tomás O’Leary and SVP of Global Marketing and Thought Leadership Hari Candadai to talk about digital transformation and philosophical takeaways other businesses could adapt.

Streamlined relationships create millions in savings

Nagalewski spoke of simplification, transparency, and mutual benefit.

“If you get the point of mutual value correct, during tough times, like what we have today, you tend to be on the right side of the coin,” he said. “When your partners are squeezed, you tend to get squeezed a little less.”

In Sainsbury’s case, that meant building a model with fewer, individually larger, and more streamlined partnerships, examining every partner’s offering in detail, and finding ways to align the U.K. retailer’s mission to the vendor’s individual needs.

This philosophy, part of Sainsbury’s ongoing Save to Invest initiative, has saved the company millions and put it in a better position to manage its IT assets in a way that suits the retailer’s forward-moving health. For instance, resources can be redirected into relationships and technology without sacrificing growth or innovation.

What can companies learn from Sainsbury’s supplier optimization strategy?

Covered at depth in the episode, here are a few points any business looking to budget and optimize costs in turbulent times should hear, direct from the Sainsbury’s story:

• Transparency matters. For Sainsbury’s, adding transparency meant surpassing its industry’s tough-negotiating reputation with open standards and consistent practices. For companies outside the retail realm, taking time to openly express your company’s overt goals, looking for points of partner alignment, and following through with forthright behavior at the negotiating table can yield similar benefits.
• Find (and give) single points of contact. Nagalewski says the team puts significant value in fostering simplified, single-point vendor relationships. In return, the $29 billion retailer made it easy for partners of all sizes to navigate and communicate with the company.
• Take the time to truly understand the partner and their offering. There is a point in the working relationship where your company’s needs, the supplier’s plans, and an optimal working relationship for all fall in the same space. It can only be discovered through understanding the vendor’s offerings in depth. This allows you to have informed conversations, make tough decisions, and ultimately create a roadmap populated by worthwhile supplier relationships.

“I think it’s the transparency,” Nagalewski said. “Companies hold back on sharing their strategies with their partners. If you can build transparency and trust between you, you know you can have a difficult conversation, a [clarifying] conversation, you’ll get the most and grow overtime.”

Want to hear more insights from Sainsbury’s? Listen to the podcast, Episode 40: “Sainsbury’s Unique Supplier Program — Saving to Invest in Digital Initiatives” now.

Hear more about Sainsbury’s story at Empower 2023. Watch the on-demand session now.