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Retail Vendor Performance Management News Round Up for December, 2016

Excellent On-Demand Videocast on Successful Vendor Compliance; RSR Benchmark Report on Supply Chain Execution

Dec. 13, 2016

by SCDigest Editorial Staff

New On-Demand Videocast: Successful Supply Chain Vendor Compliance

SCDigest recently broadcast an excellent Videocast on vendor compliance - featuring Norman Katz, author of the new book Successful Supply Chain Vendor Compliance. Also participating was Greg Holder, CEO of Compliance Networks.

We reviewed Katz's excellent book on the pages of the Retail Vendor Performance Management Bulletin earlier this year, but in this broadcast we were to get into far more detail, as Katz and SCDigest editor Dan Gilmore discuss key issues around compliance program success.

Supply Chain Digest Says...

A lack of coordination between supply chain, merchandising, and marketing topped the list of barriers to supply chain execuition excellence (no surprise there) at 61% of respondents.

In the Videocast, Katz summarized key elements of his book. Highlights of the broadcast include:

• Why it's time for this book right now

• The current state of vendor compliance - it could be a lot better, Katz says
• Compliance program guiding principles
• What is permissible under the law relative to vendor chargebacks?
• Common mistakes companies make in rolling out and maintaining vendor compliance programs
• Why retailers are often their own worst vendor compliance enemies
• The many "E's" of successful vendor compliance, from "Envision" to "Ethics"

After Katz, Holder offered his current take on the state of retail vendor compliance - a bit more upbeat that Katz's view - and then offered suggestions for both retailers and vendors on how to improve compliance program success.

Visit the Retail Vendor Performance Management home page to learn more
and subscribe to the monthly newsletter.

This excellent broadcast is not to be missed for those interested in starting or improving vendor compliance programs.

You can watch an on-demand version of the broadcast, download the slides, order the book at a discounted price and more at the following URL:

RSR Benchmark Report on Supply Chain Execution

The analysts at RSR released a new benchmark report on supply chain execution, based on a survey of primarily US-based retailers.

Here, we summarize some of the highlights, a lot of which - not surprisingly - focused on omnichannel issues.

The top three inventory management challenges cited by survey respondents were: (1) inaccurate inventory levels in stores - 57%; (2) consistent stockouts on fast-moving categories/products - 46%; and (3) too many out-of-stocks in stores - 40%.

Out-of-stocks at the distribution center level was down the list just a bit, cited by 37% of respondents as a major challenge.

The report observes relative to inventory management that "What was "close enough" in a pure store-based environment and its consequent relatively low percentage of merchandise returns has become completely unacceptable in an omnichannel world." It adds that "Supply chain execution as it relates to managing inventory no longer works the way it used to, and retailers are struggling to adjust."

Drop shipping by vendors to ecommerce customers is seen as important, but still well down the list from other fulfillment capabilities. 49% of respondents said vendor drop shipping was a "very valuable" capability, versus 71% saying direct customer shipments from DCs was very valuable. Just behind that was consumer shipments from stores (70%), ship to store for customer pick-up from ecommerce focused DCs (61%), and store-to-store transfers for customer pick-up (56%).

However, just 9% of respondents said they have no plans to initiate vendor drop shipment processes.

What are the largest barriers to improved supply chain execution?

As shown in the chart below, lack of coordination between supply chain, merchandising, and marketing topped the list (no surprise there) at 61% of respondents, far ahead of number 2 "lack of confidence in inventory accuracy" at 44%, the same percentage as for "perpetual inventory rarely matches actual inventory levels" and "we don't have the right metrics or incentives to measure cross-channel supply chain efficiencies."


Among other recommendations, RSR suggests retailers need to get more precise about what they really mean by supply chain visibility, including who really needs to see what, and just how real-time that visibility needs to be.

There is a lot more detail in the full report, available for free with registration at the RSR web site.

Your Comments/Feedback


Senior Consultant, Infosys
Posted on: May, 22 2016
Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.

Mike O'Brien

Senior editor, Access Intelligence
Posted on: May, 26 2016
Surprised to see Home Depot fall off the list; thought they were winning with Sync?

Julie Leonard

Marketing Director, Inovity
Posted on: Jun, 27 2016
Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.

Carsten Baumann

Strategic Alliance Manager, Schneider Electric
Posted on: Aug, 19 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.



Jo Ann Tudtud-Navalta

Materials Management Manager, Chong Hua Hospital, Cebu City, Philippines
Posted on: Aug, 21 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".

Sandy Montalbano

Consultant, Reshoring Initiative
Posted on: Aug, 24 2016
U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring.


Transportation Manager, N/A
Posted on: Aug, 30 2016
 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!

Ian Jansen

Posted on: Sep, 14 2016
SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.

Don Benson

Partner, Warehouse Coach
Posted on: Sep, 15 2016
Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 


Admin, Fulfillment Logistics UK Ltd
Posted on: Oct, 02 2016
Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.

Mike Dargis

President of asset-based carrier based in the Midwest, Zip Xpress Inc. (at
Posted on: Oct, 03 2016
Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at


Inventory Specialist, Syncron
Posted on: Nov, 16 2016
Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.


Bob McIntyre

National Account Executive, DBK Concepts LLC
Posted on: Nov, 21 2016
This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 



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