Becoming a Best in Class Vendor
Supplier Summer School
Instructors
Mary KleespiesDirector of Supply-Chain
Consulting
Steve Babbitt Sr. Supply-Chain
Consultant
Summer School Sessions
Action Plan for Compliance
• Understand problem: cause and effect.
• Put a team together to build the plan.
• A sequence of steps to discover what is the cause of the problem.
• Set up a Strategy to fix the problem.
Three Elements to an Action Plan
1. Specify Tasks, Strategy & Objectives: what will be done and by whom.
2. Time lines: when will it be done.
3. Accountability and Follow up: to make sure that the plan is working.
Sample Action Plan
Scenario: ASN does not match what is in the carton,
received $10K offset.
• What caused the problem?
• What you are going to do to fix the problem?
• How will you ensure that it doesn’t happen again?
Strategic Goal Strategy Objective Responsibility Timeline
1. To stop the offsets for Carton Contents does not match the
ASN. $10,000 in offsets occurred on last
shipment
1.1 What is causing the problem? And how are we going to fix the problem?What process do we need to improve to make sure that we do not have the problem in the future,
1.1.1 Auditing of all the cartons to see if it is a packing problem. Checking the ASN to make sure it matches to carton number and that mapping is correct.
Warehouse will do auditing of cartons and make sure right label are being put on the right cantons. EDI will check mapping and make sure it is correct.
Starting at once. All cartons will be audited until we find the problem. We also put in a test and check process to make sure the right labels are put on the right cartons. EDI retaining if necessary
Sample Action Plan
Building an Effective Action Plan
− Identify problem and amount ($) received in offsets
− Management Commitment
− Take ownership of the problem / Own the process
− Educate when new problems occur
− Bi-weekly conference with the Retailer to let them know the results
− Once the problem is fixed, set review dates to ensure the problem
does not occur again
− Set up controls to make sure the plan is being followed and all
employees are trained
− Keep track of the results
Effectively Asking for an Offset Adjustment • Share your action plan with retailer
• Have a positive approach with the retailer
• Communicate how the problem has been fixed
• Ask for an adjustment for the offset because you are
committed fixing the problem.
• Do not be afraid to ask more than one time. Be
persistent.
• Always ask for an adjustment to the total amount,
remember that a 50% adjustment is a fair adjustment.
Simple Guide to Vendor Compliance
• Use the EDI 850 (PO) to populate the EDI 856 (ASN)
• Carton numbers on ASN should match the numbers on carton labels on shipment to retailer
• Maintain label printer on a monthly basis – to avoid having labels that do not scan
• Transmit ASN on time!!
Simple Guide to Vendor Compliance• Transmit items that are actually shipped in the carton
on the ASN
• Invoice only what is shipped to Retailer
• Transmit ASN when trailer door closes and merchandise is on its way to Retailer
Guide to Non EDI/Best-in-Class Requirements
• Ship your merchandise in the correct size carton
• Use the correct ticket that meets retailer requirements
• Merchandise that is required to be hung should be shipped on the correct hangers
• Do not reuse cartons that are crushed or torn to ship merchandise
Do it Right the First Time and Avoid Chargebacks
• The carton or label should have the correct purchase order number
• The labels on carton should meet Retailers specifications
• Use correct label stock
• The labels on carton should be placed correctly
• Items should be packed according to business requirements
• Shipment should follow the routing guide instructions
• Pack fragile merchandise according to Retailers specification
Do it Right the First Time and Avoid Chargebacks
Summary
Action Plan to help negotiate a partial reversal Simple guide to immediately improve EDI compliance Non EDI requirements that impact a vendor’s standing
Questions?
Steve Babbitt
281.480.1121
Thank You
Mary Kleespies
281.984.3332