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Managing Vendor Compliance - By the Book

Smart New Book on Retail Vendor Compliance May be the First of Its Kind

April 26, 2016

Supply Chain Digest Editorial Staff

We’re not sure if there has really been a book before Norman Katz’s new "Successful Supplier Chain Vendor Compliance" on this topic, so maybe it’s about time. A 2007 work titled "The Vendor Compliance Handbook" by Secul and Aponte is really about starting up an apparel company, and that’s about the only other thing close we can find.

Supply Chain Digest Says...

Katz is a strong proponent of vendor compliance and chargebacks, but believes many retailers do not develop and administer these programs optimally and sometimes fairly.

Katz is well qualified to put such a book together. Currently he is head of his own consulting company, Katzscan Inc., started after he worked for a couple of consumer goods companies where he was heavily involved in compliance systems. He now does related work for both retailers and vendors.

He has also been very active in standards groups relative to compliance, notably VICS (now part of GS1), for which a few years ago he led the development of a series of six education courses on compliance that could enable a vendor manager to be "certified" in compliance management.

He is also a world class EDI expert, and has also written a book on preventing supply chain fraud.
This new book is simply a detailed primer for retailers and to a lesser extent vendors in terms of compliance program development (retailers) and how to meet retailer requirements (vendors). The insights for retailers really could be applied to any company looking to pursue or enhance vendor compliance, but the core audience in terms of program development is clearly retailers.

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Early on, Katz observes that "The development of a vendor compliance program is an introspective perspective into an enterprise’s operations, technology, and policies with regards to its own capabilities and its viewpoint of its vendors."

Katz is a strong proponent of vendor compliance and chargebacks, but believes many retailers do not develop and administer these programs optimally and sometimes fairly.

"With all the resources that some multi-billion dollar enterprises have I remain discourage and disappointed that so little exertion, such juvenile effort, goes into supply chain vendor compliance," Katz writes. He says that a variety of operational and financial benefits "are all within reach [to retailers] by simply doing a better job at vendor compliance."

One chapter SCDigest found interesting was on the legal basis for compliance and especially chargebacks/deductions. Turns out that the long history of the Uniform Commercial Code leads to the legality of such programs - though the laws of some states appear to bar deductions that exceed their true cost to the retailer. These statutes, however, are rarely if ever enforced.

There is a lot more in this informative book. We will share other highlights in the May version of the RVPM Bulletin.

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