In this article, learn about:
On-time and in-full shipping expectations
Common compliance mistakes (and how to avoid them)
Inventory management best practices
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Suppliers may typically be the ones to initiate an agreement with a distributor, but the distributor will have expectations of the supplier as well. Most of these compliance expectations surround overarching shipping expectations of suppliers, such as timelines and documentation, as well as inventory management.
This article will provide suppliers with an overview of common compliance expectations from distributors, with examples from Sysco, KeHE, UNFI, and others. This article will discuss shipping, inventory management, and common compliance mistakes and how to avoid them.
Documentation Compliance Expectations
While every distributor will operate a bit differently from one another, it is imperative that suppliers know exactly what is expected by the distributor to avoid fees.
The largest aspect of compliance is documentation. Accurate and timely documentation is the backbone of the supply chain in general, and ensuring compliance with distributors is no exception.
Advanced Shipping Notices and Bills of Lading are some of the most important documents to triple-check for compliance. It is important to ensure that both ASNs and BOLs are not sent late, and are sent within the distributor’s expected timeframe. For example, KeHE requires two BOLs per shipment, both to be sent within
Additionally, it is important to ensure that all the necessary and required information is listed on all documentation.
BOL Requirements
BOL number
PO number
Supplier number
Sending and receiving address
Ship date and arrival date
The quantities of items shipped, and the total number of items shipped
Both the weight per item and the total weight
Number of pallets
Lot and load number
Name of carrier
Depending on what is being shipped, other items like temperature and seal numbers may also need to be listed on the BOL. Additionally, all BOLs and ASNs must match the PO, otherwise, suppliers may incur a fee from the distributor or retailer or both.
On-Time and In-Full: Shipping Compliance
Sysco, KeHE, and other distributors require suppliers to schedule delivery times to their Distribution Centers (DC). This allows distributors to keep suppliers accountable and ensures that final delivery to the customer or retailer stays within an allowable timeframe.
How to schedule delivery appointments will vary from distributor to distributor, but there are some commonalities that it is important to pay attention to.
How and Where to Schedule Delivery Appointments
It is important for suppliers to know how and where to schedule delivery appointments. For example, KeHE suppliers use C3 Reservations through the KeHE portal to schedule delivery appointments. Similarly, C&S Wholesale requires suppliers to schedule delivery appointments through a software they partner with: NCR Power Traffic. Sometimes distributors may impose fees on suppliers if they do not go through the correct channels to schedule a delivery.
Timeframe for Scheduling Delivery Appointments
C&S Wholesale requires suppliers to schedule delivery appointments at least 48 hours in advance of the shipment. KeHE expects suppliers to schedule at least 3 days ahead of the appointment time. Knowing how early to schedule a delivery to a DC is important to avoid late deliveries.
How to Reschedule Delivery Appointments
McLane will charge the supplier fees should the delivery be late or require rescheduling. C&S may require the supplier to reschedule the shipment at their own expense. It is essential to understand the penalties for late or rescheduled deliveries. Avoiding these penalties is ideal, but when that is not possible, it is equally important to understand the process for rescheduling.
Related Reading: On-Time and No Show Policies with McLane Company Inc.
Best Practices for Shipping Compliance
In general, some best practices when it comes to shipping compliance are:
Labeling: Incorrect labeling can both create shipping delays and incur fees for the supplier. It is important to ensure that all labels and barcodes are accurate, readable, scannable, include all necessary details, and meet all requirements.
Packaging: Both inner and outer packaging must adhere to the standards that the distributor requires. For food and grocery distributors, this also includes packaging specific for perishable or refrigerated items.
Palletizing: Pallets must be packed according to distributor specifications. This helps ensure that products are not damaged during shipment.
Communication: Knowing where and how to communicate with distributors and their DCs is imperative to staying compliant. Issues arise constantly, and communication can help maintain smooth relationships with distributors as well as limit fees for damages, late shipments, or other issues.
Related Reading: Vendor Compliance Checklist
Common Compliance Mistakes
The biggest reason for suppliers to stay compliant is to avoid incurring fees.
Late or Incorrect Documentation
The most common compliance errors come from incorrect or late documentation. Ensuring that POs, ASNs, BOLs, and all other necessary documentation are sent within the required time windows, and include all the correct and required information, is imperative.
Poor Lead Time Management
It is important to understand lead times on both the supplier and distributor sides. Understanding the necessity of lead times, and how to work within and around them, will make the entire distribution process smoother—from manufacturing to final sale. Not accounting for lead times will inevitably put the supplier behind schedule, which could result in late shipments.
Incorrect Packaging, Labeling, and/or Palletizing
It can be complicated to ensure that all products are correctly packaged, labeled, and palletized, particularly when suppliers work with multiple distributors who vary in compliance expectations in these areas. Incorrect packaging and palletizing may not only lead to compliance fines, but could also damage products.
Ultimately, poor inventory management leads to all the common mistakes listed above, and well-managed inventory will help prevent those mistakes along with others.
Inventory Management
The first order of business is to ensure an organized inventory management system to maintain accurate documentation, keep shipments running smoothly and on time, and avoid errors and fines.
Well-managed inventory means that suppliers know with certainty what product is available, what may require more lead time, and how to document each item with accuracy quickly.
Well-managed inventory means that suppliers can more easily stay compliant with distributors, primarily through product and lot tracking and traceability, which in turn:
Prevents late shipments
Reduces shortage or overage shipments
Supports correct packaging and labeling
Helps meet shelf-life requirements for shipments
Some best practices for well-managed inventory are:
Utilize automated inventory management software to better track real-time data.
Audit inventory, and inventory management processes, regularly.
Make sure that all inventory is packaged according to distributor standards before shipment.
Utilize forecasting and replenishment tools.
Understand the distributor’s lead times and plan inventory around them.
Related Reading: What is Aggregate Inventory Management?
Disputing Compliance Deductions and Chargebacks
Even if suppliers adhere to every best practice and avoid every common mistake, things may still go wrong. Traffic could delay a shipment, or a rough trip may damage products. Both of those examples would incur deductions or fees from the distributor when the supplier receives the paid invoice. Knowing when and how to dispute deductions is an important final piece of the compliance puzzle.
Some helpful questions to ask in navigating the disputing process with a distributor are:
Is this compliance deduction disputable?
What documentation does the distributor require for a successful dispute?
How does the distributor require the dispute to be filed?
What is the expected timeframe before a deduction is no longer disputable?
How soon can the supplier expect a response to the dispute after it has been submitted?
Related Reading: How Conventional Suppliers Dispute UNFI Deductions
Deduction Help with SupplyPike
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