The company, which operates 760 stores across the UK and Ireland, began a project last June, allowing key suppliers such as Coca-Cola and Sun Valley Foods to tap into relevant replenishment and forecasting data stored in its JDA retail systems.
Sharing information with suppliers via JDA's web portal, Marketplace.com, has dramatically increased the effectiveness of events and promotions, reduced distribution costs and cut warehouse stock, said James Hulse, supplier development manager at Iceland.
"Since the private label manufacturing process is typically geared towards unique specifications, matching supply with demand is especially crucial," he said.
"We are now giving our suppliers access to the store as well as warehouse data required to help them to manage their business with us far more effectively."
The system adds an additional layer of security so that all collaborative applications reside behind Iceland's firewall. It also incorporates software that allows selected reports to be distributed to defined users by e-mail.
Before the initiative was launched, a supplier to Iceland was working with limited information in an uncertain environment, resulting in markdowns or inefficient use of transport, Hulse said.
Few suppliers had visibility beyond their dispatches or knowledge of the Iceland business. When information was shared, suppliers could not react quickly enough to changes in stock requirements and increased consumer demand.
"Getting forecasts wrong can and does lead to significant cases of overstock," Hulse said.
"By allowing our suppliers to get more involved in the entire supply chain we knew we could benefit from fewer stock-outs, improved availability, more successful promotions and, ultimately, better customer service."
Since the introduction of the initiative Sun Valley Foods has seen significantly lower distribution costs and increased vehicle utilisation.
This year, it has achieved the lowest average pallet rate ever with Iceland, said Ian Parkes, supply chain planning manager at Sun Valley.
"We try to deliver into Iceland less frequently, with fuller loads, so we have reduced delivery costs significantly, partly by sharing loads with another supplier," he said.