Vendor Compliance Penalties have become a real problem for all retail suppliers. Small vendors, especially, are having problems keeping up with the ever-increasing complexity of doing business in the electronic age.
Bog-box retailers are highly computerized and automated throughout the logistics operations and expect their suppliers to be able to match them, deal with them electronically, and ship the goods in a way that the retail systems can process without much in the way of manual labor.
The problem is, of course, that vendors tend to be small with manual warehouse operations, while the retailers are large and can afford the benefits of large-scale automation. Arguably, dealing with big-box today is more complicated than selling to the Federal government – who ever thought that would be the case?
Vendor Compliance is here to stay, having become so important to retailers as both an enforcement tool as well as a very significant profit source, so if suppliers want to stay in business, they need to learn to cope with it. Click here to see a Best Practices White Paper on this subject.
The financial impact can be very severe – frequently exceeding 1% of a supplier’s revenues, which could equate to 10 to 20% of their profits (if they have profits), so it’s a big deal. Not surprisingly, since its not a sexy area, it has not always gotten much CEO attention.
Top 8 Causes of Compliance Violations
- ASN/EDI errors
- Poor fill rates
- Late Deliveries
- Early Deliveries
- Shipment shortages
- Packing, UPC ticketing errors
- Invoicing errors
Take a look at our white paper, referenced above, for ideas on how you can kick-off a program to reduce this debilitating, revenue dilution, and profit dilution problem in your company.