A book that governs the relationship between suppliers and a retailers is known as the Groceries Supply Code of Practice and it is usually abbreviated as GSCOP. Apart from governing the relationship, the code ensures that both suppliers and retailers know their rights as what actions to take when some rights get violated. The benefits that are associated with GSCOP are briefly highlighted below.
Since the code necessitates fair dealings it goes a long way in ensuring that risks are not transferred from one party to the other. With the help of the code of conduct, it becomes easy to check for where deals went sour since it acts as a reference point on how the two parties need to act. Having a code provides an equal playing field for both the supplier and retailer since there is a mutual understanding of an ideal transaction.
An advantage of the code is that it ensures that both parties can understand it since it is very simple and straightforward. Suppliers, for instance, can only supply products that were requested originally by the retailer and this agreement needs to be in writing. To make the working relationship easier; retailers are prohibited from altering their orders after they have sent an original order.
The agreement states that things like payments need to be done on time after the supplier has supplied the grocery items. The downside of delayed payments for suppliers is that it greatly affected their cash flow and that is why the conduct ensured that such delays should not occur. The code has a rule against this ensuring that after the invoice has been acknowledged any challenges on it are made within a month, and if there are no issues then the retailers need to make payments so that there is no delay in payments.
Burdens of shrinkage is something that was easily transferable to the supplier in the past. As per the code of conduct, things like shrinkages are meant to be the burden of the retailers and not necessarily that of the suppliers since they are responsible for things like safety at the depot. Since suppliers are not liable for such losses; retailers have to be cautious with their products especially when it comes to things like safety and loss as a result of theft since the suppliers are not entitled to pay for such kind of things.
There is also provision for a senior buyer of the retailer to actually review orders and agreements between the supplier and retailers. Independent third parties are ideal especially when it comes to things like transactions between two parties. In case there is a dispute; it becomes easy for the third party to be able to evaluate who was actually on the wrong based on the orders that they have at hand.