Tesco is revamping its supplier relations through a new payment system prioritizing trust.
- The Good Faith Receiving system streamlines payments and reduces delivery disputes.
- Timely payments are achieved without prior discrepancy checks, barring critical issues.
- Independent audits will bolster transparency and fairness for Tesco suppliers.
- Industry pressure and voluntary supplier adoption mark Tesco’s initiative progress.
In a forward-thinking approach to improve supplier relations, Tesco introduces a redesigned payment structure emphasizing trust-based operations. The deployment of the Good Faith Receiving (GFR) system stands as a strategic move to enhance payment efficiency and minimize conflicts that arise from stock delivery inaccuracies.
The GFR system is predicated on the understanding that the majority of deliveries are accurate. This foundation allows Tesco to execute payments without preliminary checks for discrepancies, which are instead addressed at scheduled intervals. Such a system promises swifter payment processes, free from the delays typically associated with administrative discrepancies.
To support this initiative, Tesco ensures an added layer of fairness by employing third-party audits, conducted randomly to check for delivery accuracy. Additionally, a dedicated GFR team is in place to assist suppliers in adjusting to this new system, offering educational resources such as webinars and on-site consultations.
Competitively aligning with industry peers like Sainsbury’s, Morrisons, and others who have integrated similar systems, Tesco’s move reflects broader industry trends pushed by the Groceries Code Adjudicator’s efforts to curb late payments and unjust financial deductions. Currently, 14% of suppliers report late payments, emphasizing the need for such innovations.
Tesco’s decision to make GFR adoption optional underscores a respect for supplier autonomy, allowing them to choose involvement. This progressive choice, amid industry and regulatory pressures, portrays Tesco’s dedication to evolving supplier relationships.
Tesco’s adoption of the GFR system marks a significant step towards fostering stronger, trust-based supplier relationships.
