Probably hundreds of retailers have vendor compliance programs, though the scope and maturity of those programs varies widely.
Supply Chain Digest Says... |
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| One respondent in a side comment noted that "It isn't at all about the chargeback, it's about perfecting retail logistics." |
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What kinds of supply chain problems or issues are retailers trying to solve with such vendor programs?
Several years ago, SCDigest's research arm Chief Supply Chain Officer Insights conducted a survey of more than 20 clients of retail vendor performance management software provider Compliance Networks on a variety of issues.
One thing we wanted to understand what problems retailers were trying to solve when they decided to engage a compliance optimization solution.
Respondents were presented with a series of potential problems, and asked which of these were important issues to their companies when they adopted compliance optimization software.
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As can be seen from the graphic below, improving shipment accuracy and the related category of reducing DC “problem shipments” topped the list, each cited by 85% of respondents. ("Problem shipments" is a term often used in retail to describe a receipt that is just difficult to process for any of a number of reasons, or the shipment sits in the DC awaiting direction from somewhere else in the organization, such as IT or merchandising.)
Those top two responses were followed by third place "poor fill rates," cited by 77% of respondents.
Late shipments, carrier routing issues, "floor ready" issues, and problems with labeling and documentation also scored high.
We also note that 54% of respondents cited "cost to track compliance manually/with existing systems" as a problem to be solved with a new compliance optimization solution. While that was tied for the low spot with ASN/EDI problems, it implied more than half the respondents either had built an internal system that just could not keep up or needed too much maintenance, or that the company had looked at building a compliance tool internally and found it would be too expensive or take too long.
One respondent in a side comment noted that "It isn't at all about the chargeback, it's about perfecting retail logistics." But another said, "We simply were not able to identify all the violations we were experiencing with our internal systems, and now with this software we can."
Another survey respondent said that "Our project was viewed as a skunk works type of program that was very limited in scope, but after the fact this has very much changed. It is well recognized as having a big impact on our supply chain improvement since then."
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