Vendor compliance does not have to be a contentious issue. Ultimately, retailers and vendors support the goal of creating the most efficient retail supply chain possible. Through standard operating practices, retailers are trying to gain efficiencies and savings that can be passed on to the consumer.
But complying with these standards can be challenging, particularly for smaller vendors who lack the resources to monitor and execute requirements across multiple customers. Many of these smaller vendors accept chargebacks as a cost of doing business. They should not. There are measures the small- to mid-sized vendor can institute to control chargeback “fines.” (See our white paper -- Reducing Shipping-Related Chargebacks: Strategies for Small- to Medium-Sized Vendors.) These are the same measures that will improve relations with vendors and contribute to the goal of the perfect order, every time.
Consumer product companies can either develop vendor compliance expertise and hire the resources internally or partner with a third-party logistics firm like California Distribution, with the vendor compliance services to manage compliance processes on the vendor’s behalf.
California Distribution Vendor Compliance Services
Routing guide review. CDI carefully reviews the routing guides of our client’s retail customers to identify relevant shipping guidelines. CDI captures these shipping-related guidelines and loads them into CDI’s proprietary Compliance Database. This database is used to feed our operational systems so staff has consignee-specific data on shipment requirements. For instance, with the data in CDI’s WMS system, pick tickets can be printed out with instructions for carton labeling. Additionally, with the data in the WMS, customer-specific routing instructions can be printed directly on the VICS Bill of Lading.
By doing a thorough review of the routing guide and extracting only the relevant shipping requirements, compliance guidelines can be more easily managed. Once a routing guide review is completed and relevant guidelines identified, CDI sends these requirements to the client to get their concurrence that these are, in fact, all the shipping-related guidelines.
Routing Guide Monitoring. CDI tracks routing guide updates through our subscription to monitoring services established to help vendors stay informed on routing guide changes. CDI monitors these changes on our clients’ behalf. We are immediately notified of guide updates, by retailer, and we amend our database and processes to reflect the change and contact our client to update them on the changes.
Label Creation and Testing. CDI can create UCC 128 bar code labels and UPC labels, as well as generic labels. We program and test the label, then present it to our client who seeks approval from their retail customer. As part of our vendor compliance services, we also monitor the retailer’s requirements and update labels should these label requirements change.
EDI Transmissions. On our client’s behalf, CDI can receive
an order from a retailer via an EDI 850 feed. Upon client approval,
we can then send a receipt confirmation to the retailer. We then
ship the order and can send an advance shipping notification (EDI 856
feed) to the retailer, which lets them know the exact items that have
been shipped and the time window within which they will arrive. A
copy of the 856 can also be sent to the vendor to trigger an invoice
for the goods. A range of EDI solutions are available as
part of our vendor compliance services package.
Shipment Consolidation. Some retailers set limits on
the number of shipments they will receive from a vendor per week. CDI
will manage shipment frequency based on individual retailer requirements and
consolidate shipments, as necessary.
Pre-shipment Audit. CDI reviews every order before it is shipped for compliance with retailer requirements. We have a full-time compliance auditor on staff. This quality review is aided by a customer-specific checklist, created from CDI’s Compliance Database. Our warehouse staff reviews the shipment against this checklist to assure compliance with all requirements. Identified problems are addressed prior to shipment.
Chargeback tracking. CDI will perform this service on request. Our client sends a report of chargebacks to CDI. We then research the charge and determine if it was valid. CDI can provide chargeback metric reports, by retailer, to verify performance. Where problems are identified, CDI conducts a root cause analysis and develops a preventative action plan to eliminate the cause and prevent future chargebacks.
Chargeback Dispute Support. CDI advises clients on how they can dispute and reverse chargebacks, if appropriate. In some cases, CDI may be able to provide the documentation required to dispute the charge.
