Tesco is enhancing its supplier relationships through the Good Faith Receiving (GFR) system.
- The GFR system aims to expedite supplier payments by limiting delivery discrepancies.
- An independent third party will sample-check deliveries to ensure transparency.
- Tesco provides support to suppliers via a dedicated team and educational resources.
- The industry’s shift to GFR addresses supplier concerns on late payments.
Tesco is taking significant strides towards improving its relationships with suppliers by implementing the Good Faith Receiving (GFR) system, an innovative approach designed to streamline payment processes and reduce disputes over stock deliveries. This initiative reflects Tesco’s commitment to efficiency and trust within its supply chain systems.
The principle underlying the GFR approach is straightforward but impactful: most supplier deliveries are assumed to be accurate. This assumption allows for timely payments and minimises disruptions caused by discrepancies in volume or stock condition, which are addressed later, often on a quarterly basis.
To ensure transparency and fairness within this system, deliveries will undergo sample checks conducted by an independent third party. This layer of oversight aims to maintain the integrity of the process, reassuring suppliers of the system’s credibility.
Furthermore, Tesco is not leaving its partners in the dark during this transition. A dedicated GFR team has been assembled to support suppliers, offering webinars and site visits to assist in adapting to this new payment procedure. This comprehensive support underscores the retailer’s dedication to its supply network’s seamless adaptation to the GFR system.
Notably, Tesco aligns itself with other major retailers like Sainsbury’s, Morrisons, Asda, Co-op, and Waitrose, who have adopted similar GFR systems in response to the Groceries Code Adjudicator’s (GCA) push to rectify late payments and unfair deductions. This movement within the industry is highlighted by GCA Mark White, who recently pointed out that 14% of suppliers reported payment delays in the 2024 supplier survey.
The system is designed to be flexible, allowing suppliers the option to voluntarily opt-in or out, ensuring that participation aligns with their operational needs.
Tesco’s implementation of the GFR system marks a significant evolution in supplier relations, reflecting broader industry trends.
