Effective Compliance Strategies for Target's On-Time and In-Full Program

Learn About: 

• Effective Compliance Strategies 

• Dispute Submission Process for Compliance Chargebacks 

• Interacting with the Supplier Performance Management Team

---

In our recent article, "Target Compliance Policy Update," we broke down some major changes coming to Target's compliance policies starting August 4, 2024. In this article we'll outline some hands-on tips and best practices to help suppliers stay on top of the changes and dodge penalties. 

Effective Strategies for Target's Fill Rate Requirements

1. Understand and Follow EDI 850 Specifications

• Familiarize yourself with the EDI 850 purchase order details, which communicate the original quantity expected. Ensure all team members handling orders are trained to interpret and use this information correctly.

• Refer to the "Fill Rate Original Overview" for a deeper understanding of how fill rates are calculated and the implications of any deviations.

For more information on EDI documents, download our 'EDI for Retail Supply Chains Cheat Sheet'. 

2. Communicate Changes Proactively

If there's a change in order quantities, tell Target as soon as the purchase order is approved. This keeps everyone in sync and avoids compliance slip-ups.

• For 'They Pay/Prepaid/OTA' shipments: communicate changes before setting up logistics at the Distribution Center (DC) and before sending the EDI 856 data.

• For 'We Pay/Collect/OTS' shipments: talk to Target before making Vendor Routing System (VRS) entries and sending the EDI 856 data.

3. Implement Rigorous Inventory Management

Develop a solid inventory system to accurately predict and track stock levels. This ensures you always have enough goods to fill Target's orders. Use advanced forecasting tools and analytics to anticipate demand changes and tweak your inventory as needed. If within your organization's budget, utilize forecasting systems and applications to help with the rigorous workload involved.

4. Regular Monitoring and Reporting

Keep an eye on your fill rate performance every week. This helps spot trends or recurring problems that might lead to non-compliance. Also, keep a close watch on your Supplier Item Fill Rate Violation Summary Report within Greenfield to understand where chargebacks are happening and fix issues quickly.

Effective Strategies for Target's On-Time Ship (Collect/We Pay) Requirements 

1. Adherence to VRS Deadlines

• Make sure to enter all shipments into the Vendor Ready Ship (VRS) system by 11:00 AM Central Time two business days before the pickup date. For example, if pickup is on Wednesday, enter the shipment by Monday morning.

• Get comfortable with the VRS system and ensure your logistics team is well-trained. Utilize the Vendor Ready Ship (VRS) Training materials Target provides for a full understanding.

2. Accurate Scheduling Within Ship Windows

• Always select pickup dates in VRS that fit within your assigned shipping window. Make sure the earliest and latest possible pickup dates in VRS match the ones you plan on using.

• If provided ship windows don't match your lead times due to reasons beyond your control, quickly communicate with Target's Inventory Analyst. Wait for confirmation via EDI 860 before making any changes to your planned shipments.

3. Preparation and Flexibility

• Have your products ready and ensure there are open slots for the scheduled pickup date. If unexpected delays arise, cancel and re-enter the load in VRS for a new date.

• Act swiftly if a Target carrier misses their pickup. Avoid re-entering information in VRS; reschedule within two business days and escalate if the pickup isn't completed within three days using the specified contacts.

4. Efficient Loading Process

• Be prepared to load Target carriers efficiently within two hours of their arrival. Delays can lead to chargebacks, so keep your loading operations smooth and swift.

Effective Strategies for Target's On-Time Release and Supplier Pickup Adherence (Collect/We Pay) Requirements

1. Engagement with ShipIQ

• Regularly check and update the shipment details in ShipIQ to ensure they are accurate. This is an important step for ShipIQ to proceed with routing and scheduling pickups. Take advantage of the ShipIQ Academy - Application Training to learn how to effectively use the system.

• Keep an eye on the Expected Release Time calculations in ShipIQ:

  • PO Ship End minus 5 business days

  • PO Create plus 2 business days

• Always monitor the expected release countdown in ShipIQ to stay compliant with the timing requirements.

2. Handling Defects and Delays

• Accurately use the provided reason codes when logging defects such as:

  • Inventory Not Ready

  • No Pickup Appointments Available/Business Closed

  • Approved Load Leveling -- Over VOP Outbound Daily Capacity

  • Target Adjusted Quantity

• For delays caused by the carrier, coordinate directly with them to reschedule within two business days.

3. Operational Adjustments

• Set your processing time in VMM to at least five days and avoid ship end windows that fall on weekends. If needed, collaborate with your Target Inventory Analyst (IA) and Senior Merchandise Specialist (SMS) to adjust your Volume Order Profile (VOP) or change the order placement date.

• Ensure Purchase Orders are correctly designated for your VOP pickup location and work with your Inventory Management team for any necessary corrections.

Effective Strategies for Target's On-Time Arrival (Prepaid/They Pay) Requirements

1. Schedule Appointments Proactively

• Collaborate with your carriers to schedule delivery appointments at Target's Regional Distribution Centers (RDCs) or Food Distribution Centers (FDCs). Aim to secure these appointments at least 48 hours before the Purchase Order Estimated Time of Arrival (PO ETA) or Scheduled Delivery Appointment (SDA). This helps secure a preferred time slot and prevents last-minute scheduling that could harm compliance.

2. Adhere to Specific Arrival Windows

• Make sure your carriers are fully aware of and stick to the designated arrival windows. For Drop Trailers, there is a grace period of 12 hours before and 4 hours after the scheduled time. Live Trailers, however, must arrive within 30 minutes of their appointment time, or they will need to reschedule.

• For non-perishable items, arriving one day early or one day late is still acceptable. But for deliveries to FDCs, the arrival must strictly match the PO ETA/SDA date without flexibility for early or late scheduling.

3. Use Designated Scheduling Systems

• Use the specific systems Target mandates for scheduling deliveries---Ryder for RDCs and Docklink for FDCs. Access to the yard requires a valid appointment confirmation number from these systems, so be sure to follow Target's guidelines for scheduling through Ryder and Docklink.

Dispute Submission Process for Compliance Chargebacks

If you're facing a compliance chargeback from Target after a two-week violation period, you have the right to dispute it. Here's a straightforward, step-by-step guide to using the Synergy Vendor Dispute (SVD) application effectively:

1. Access the Synergy Vendor Dispute Application

• Log into the POL platform and select the Synergy Vendor Dispute application from the "Application" section.

2. Submit Disputes Individually

• Each compliance charge, identifiable by a VC prefix, needs to be disputed separately. This is because compliance assessments are specific to each PO and location.

3. Documentation Submission

• Attach all necessary documents to each dispute entry. This could include communications with Target's Buying Team or Inventory Analysts, particularly if a compliance issue was due to factors controlled by Target (i.e. e-mails, screenshots from Greenfield, PODs, BOLs, etc.).

• Ensure all documents are clearly relevant to your case. The Synergy system accepts various file types like PNG, JPG, PDF, GIF, TIF, EML, and CSV and supports individual file sizes up to 10MB, with a total upload limit of 200MB.

4. Complete Key Fields Accurately

• Document Number: enter the VC number exactly as it appears, including the prefix 'VC'.

• Deduction and Reason for Disputing: these fields should auto-populate correctly when you enter the VC number accurately.

To effectively manage disputes and maintain compliance, it is helpful to regularly engage with the SPMD Summary Report, accessible through POL and updated every Monday. This report provides a detailed overview of your performance, highlighting aspects such as violations, exceptions, and net chargebacks.

Interacting with the Supplier Performance Management Team

The Supplier Performance Management (SPM) Team at Target is a key resource for suppliers dealing with compliance updates. This team helps you understand and meet Target's strict standards by managing performance metrics and offering guidance on compliance matters. By working closely with the SPM Team, you can clear up any confusion about what's expected, get help with compliance challenges, and efficiently handle exemption requests.

For more insights into how connecting with the SPM Team can boost your business, check out our article, "3 Reasons Connecting with Target's Supplier Performance Management Team Can Help Your Business."

How SupplyPike Can Help

Interested in improving compliance at Target? SupplyPike offers solutions to gather data and verify chargebacks, automatically disputing invalid ones and swiftly reclaiming lost funds. 

SupplyPike's flat-rate solution is designed to encourage supplier improvement, preventing chargebacks and compliance fines while actively winning back lost revenue. Schedule a meeting with a team member to see if SupplyPike is a good fit for your Target business!

Interested in more content (articles, webinars, cheat sheets, eBooks) like this? Sign up for our newsletter to stay in the loop!