How to Ensure That You’re Servicing Your Vendors Correctly
Chargebacks…the phrase alone might send chills down your spine. Chargebacks do nothing more than diminish your profit margin, yet they are becoming more of an industry norm. Some vendors have a reputation for assessing chargebacks for products they receive which do not conform to their requirements and others simply reject the goods. Whichever quality control measures that your vendors enforce, keeping up with their standards is a full-time job in itself. No matter how many new guidelines or processes are being rolled out, the key to successful relationships with your vendors will always be compliance. Here are some of the key areas to monitor, which differ with each consignee, to ensure that you are in compliance with your vendor’s guidelines:
- Routing Guidelines – one of the most important factors for working efficiently with your vendor is properly following their routing guidelines. Does the vendor have preferred carriers and scheduling procedures for inbound deliveries? Does the vendor prefer that you utilize Electronic Data Interchange (EDI) to transmit information to them? Is there are MABD (Must Arrive By Date), a delivery window of a few days or do they expect to receive product on a specific day?
- Pallet Requirements – abiding by your vendors’ pallet requirements is essential for ensuring that your loads aren’t rejected to be reworked at your cost. Does your vendor require GMA (Grocery Manufacturers Association), Grade A, CHEP, or PECO pallets? Do the pallets require cornerboards, slipsheets, or pallet caps for added protection during and after transportation? Is there a maximum pallet height that the vendor can handle in their distribution centers and retail stores?
- Inventory Management – ensure that you have enough inventory in stock to fulfill your orders and prevent your vendors from receive short shipments or mis-shipments. Your vendors have customers to keep happy too, and they won’t be able to achieve that without your product being available. Do they have minimum order fill rate expectations? Are you responsible for delivering product shorted from orders?
- Item Tracking – well-defined item numbers, SKUs (Stock Keeping Units), UPCs (Universal Product Codes), lot/expiration codes and ti-hi/ block and tier, make the order fulfilment process much cleaner. It’s advisable to keep this item information consistent for all vendors. Consistent item information will make it easier to ensure that your data matches up on all of your paperwork, such as the ASNs (Advance Shipment Notifications) being sent to your vendors.
- Labeling Standards – the unfortunate side effect of vendors improving their logistics processes is that it can make your processes more complicated and costlier. A major example of this are consignee specific shipping labels, which are being required by more and more retailers. Consignee specific shipping labels enable retailers to have greater shipment visibly and to receive inbounds more efficiently. However, consignee specific labels also require your warehouse to re-handle every case to apply the labels, which can increase your costs.
Even with all this in mind, vendor compliance can be a burden to manage. Vendor compliance can consume much of your time and money, taking you away from growing your business. Partnering with a third-party logistics provider (3PL) that has relationships with your vendors and knows their guidelines, can make your order fulfillment process much simpler. At Port Jersey Logistics, we have 64 years of experience dealing with major distributors and retailers across the country. If you are struggling to service your vendors correctly, contact us today to discuss what you can do differently.