In this article, learn about:
How poor documentation can lead to compliance issues
Why accurate labeling and packing prevents damage and delays
The importance of timing and proactive communication
As any supplier knows, things can go wrong quickly—especially when shipping goods is involved. When delays, damages, or shortages occur, it’s common for a supplier to face deductions and fines from the retailer. Recurring issues can then snowball into significant profit loss. It’s far simpler and more cost-effective to prevent issues before they occur.
While some issues are inevitable, understanding where they are most likely to pop up can help your business develop processes to prevent them prevent issues and avoid repeated mistakes.
Ensure Complete and Accurate Documents
Incorrect, incomplete, or missing documentation can lead to delays, deductions, and compliance violations. Suppliers should have standardized practices for completing, sending, and storing shipping documentation. Some of the most common shipping documents are:
Advance Shipment Notice (ASN): This document is sent from the supplier to the retailer, providing key details about a shipment before it arrives at its destination. ASNs include information on the order, shipment, item, and pack level.
BOL (Bill of Lading): A BOL is a document passed between the shipper and carrier. It outlines the details of the shipment, including information about the shipper, freight, carrier, and recipient/consignee. A clear and complete POL is crucial for smooth transportation. Errors, such as incorrect product count, weight, or destination, can all create major issues when attempting to deliver the shipment.
POD (Proof of Delivery): Proof of Delivery is a confirmation that the shipment recipient/consignee signs to confirm the receipt of the delivery. PODs indicate if the shipment was received on time, in full, and in the expected condition.
Not only is it essential to ensure shipping documents are complete and accurate, it’s also important to have a thorough record-keeping system for storing and retrieving documents in case issues arise. ASNs, PODs, and BOLs are all essential documentation for disputing invalid deductions.
Related Reading: Reclassifications and Reweighs in Freight Shipping
Package and Palletize Correctly
A successful shipment starts with appropriate packaging and palletizing of the products. Retailers typically have set requirements, but it’s still wise for a supplier to develop and document internal best practices to help reduce risk and avoid damage.
Packaging
Use appropriate packing materials: Select packing materials that accommodate the product type and fragility. For example, fragile items may require bubble wrap, foam inserts, or extra packing paper, while perishables might need insulated or moisture-resistant packaging. It’s also important to ensure the retailer doesn’t have any restrictions on the type of packing materials used.
Use the correct box size: Overpacking can lead to crushed items, while underpacking can cause shifting in transit, both of which increase the likelihood of damaged products. Use right-sized boxes that minimize wasted space while protecting the contents.
Follow retailer specifications: Many retailers require specific case pack quantities, inner/outer pack formats, and labeling on unit or case-level packaging. Failing to comply can lead to rejections or fines.
Related Reading: What Are the Different Types of Pack Sizes?
Pallets
How boxes are stacked on pallets is important for using space efficiently and ensuring items remain stable during transit. TI/HI refers to the pattern in which boxes are stacked on a pallet:
TI = The number of boxes that can be placed on a pallet.
HI = The number of layers that can be safely placed on a pallet.
An accurate TI/HI calculation helps prevent damage to goods during the storage and transportation phases, as well as reduce risk of harm for the people handling the pallets. There are several best practices to follow when maximize TI/HI:
Stack heavy goods first, making sure weight is distributed evenly.
Stack up to the edge of the pallet but never let boxes hang over it.
Avoid leaving empty spaces, as these can make items more likely to shift.
Utilize an overlapping pattern, when the first level lays one direction and each subsequent level rotates.
Securely strap everything down to prevent sliding during transit.
Related Reading: What is TI/HI?
Use Clear and Compliant Labeling
Each retailer typically has its own set of requirements regarding labeling, but there are best practices you can implement across the board to reduce compliance issues:
Make sure labels are readable and correctly placed: Labels should be easy to scan, free from ink smudges or wrinkle lines. They should also be placed in a location that allows for efficient receiving on the retailer’s side. Some retailers may have requirements for exact placement.
Use weather- and wear-resistant labels: Shipments may be subject to a variety of conditions on their route. It’s important that labels are resistant to wear and tear from handling and changes in humidity/temperature to prevent the information from becoming illegible or unscannable.
Test barcodes: If your shipment contains scannable labels, it’s important to test these in-house. A nonfunctioning barcode may prevent inventory from being properly recorded or received by the retailer, possibly resulting in deductions.
Schedule and Ship with Precise Timing
For shipments, timing is everything. Even if your shipment is documented, packaged, palletized, and labeled correctly, poor timing can still jeopardize your performance and potentially lead to penalties for non-compliance. Be careful of:
ASN timing: ASNs must be successfully transmitted to the retailer before the shipment arrives at the warehouse/distribution center/store to prevent receiving issues. Late or missing ASNs can trigger fines, cause confusion, and prevent products from being properly received.
Shipping windows: Many retailers have specified shipping windows for deliveries. If a shipment arrives early or late, even by a slim margin of time, this can hurt a supplier’s On Time In Full (OTIF) score and lead to non-compliance fines.
Factoring in lead time: It’s important for a supplier to have a strong understanding of their lead time, which refers to the amount of time it takes to prepare, pack, and transport goods upon receipt of the Purchase Order.
Retailer calendars: Some retailers have holidays, blackout dates, or other restrictions that may prevent deliveries on specific days. It’s important to stay on top of these to prevent failed deliveries and wasted time and resources.
Related Reading: What is Lead Time and How Does it Affect Retail?
Maintain Proactive Communication
Shipping mistakes can be costly but are often preventable. As with most areas of the supply chain, communication is key. Even if an issue has occurred, sometimes proactive communication can prevent it from escalating into deductions or fines.
By implementing best practices for internal and external communication, suppliers can create more resilient shipping processes, allowing them to prevent issues or quickly adapt when problems arise. For example, internally, a supplier could create clear workflows for escalating issues quickly, and externally, they could establish protocols for notifying retailers or carriers about unexpected delays.