In this article, learn about:
The supplier policy for purchase orders at KeHE
Essential timelines for PO management
How item/product changes impacts KeHE orders
How to deal with discrepancies, substitutions, and cancellations for KeHE purchase orders
Turnover orders through KeHE
How to do a price change at KeHE
Purchase Orders at retailers are complicated enough for suppliers to manage, but when working with a distributor like KeHE, the complications are multiplied. Smaller suppliers who can’t get into larger retailers on their own brand’s fame alone, are usually forced into working with distributors to get their products more buyer visibility in the retail space.
This process works well for many, but adding another player into the distribution process also adds the possibility for errors and fines, making what can be a narrow profit margin even narrower.
Even still, suppliers will take calculated risks to work with distributors to get more brand visibility to customers. At KeHE, there are a unique set of challenges that come with responding to and managing orders.
Related Reading: How to Select a Distributor
Purchase Orders Supplier Policy at KeHE
The basics of order management at KeHE starts with an understanding of their policies and protocols as outlined in the KeHE Supplier Policies and Procedures document.
All KeHE orders for suppliers come in the form of POs via EDI 850s. Anything not ordered by KeHE in the form of a PO should not be shipped to a KeHE DC. Over-shipped items will be considered overages and fined accordingly.
There are occasional exceptions to the rule that POs are sent as EDI 850s, but these are rare and usually agreed upon previously between all parties involved.
Related Reading: What is a Purchase Order?
Essential Timelines for PO Management
Suppliers have one business day to confirm the receipt of a PO from KeHE. Suppliers also have five business days before pickup or shipping (depending on shipping method) to confirm products and quantities on all POs.
How Item/Product Changes Impacts KeHE Orders
When updating products or making item changes, KeHE requires a minimum of 90 days notice before the POs are sent. If you plan to make an item change, make sure that you have enough time planned out beforehand.
Item changes can be made using the Item Change Form in the Supplier Portal. Item changes pushed to orders within that 90 day period are subject to fines.
In addition, KeHE suppliers are required to accept returns for all unsold products in the first six months from the introduction of a new KeHE item. Suppliers have to take on this risk with the introduction of each new item being sold in KeHE. This policy applies to seasonal items as well, even if they have been sold and shipped to KeHe DCs in the past.
KeHE also reserves the right to withhold payment for items shipped through new KeHE DCs until the items have been sold in their final destination (i.e., a retailer).
How to Deal with Discrepancies, Substitutions, and Cancellations for KeHE Purchase Orders
In the real world of ordering, shipping, and payment, when dealing with any trading partner, discrepancies are inevitable. When discrepancies occur, fines are common, and narrow the threshold between profit and loss.
Whenever there is a discrepancy between pricing on the PO and the supplier invoice, KeHE will pay the lower of the two.
To make adjustments to a PO, suppliers should fill out a “PO Opportunity Form” and send it to the Vendor Support team via email at vendorsupport@kehe.com. KeHE’s official policy is that “any adjustments to PO pricing or discounts” should be reflected in a revised PO. This is an altogether different process from a regular price change (see the section below for more on that).
KeHE does not accept any backorders. KeHE also reserves the right to change products and quantities ordered on a PO, but does not accept those changes from suppliers. All PO adjustments must be made by KeHE, and substitutions are not allowed.
As a distributor, KeHE does not guarantee the purchase of any of their items by the retailers. Any items that are not purchased by the retailer will be returned to the supplier and charged back or returned to the supplier by KeHE.
This means that sales performance levels are not guaranteed by KeHE. KeHE refers to these POs as a “separate arm’s-length transaction,” meaning that they are acting solely as a distributor in a longer chain of transactions.
KeHE further reserves the right to cancel any or all of a PO prior to the supplier’s shipment, so careful attention to the most up-to-date PO is essential for not over- or miss-shipping. Suppliers are also prone to fees from shipments on POs that have been altered or cancelled.
Turnover Orders Through KeHE
A common occurrence for suppliers working with KeHE is what are called Turnover Orders. These are discounted, one-time transactions that the retailer requests of the supplier through KeHE.
These discounts are automatically sent on to the supplier through KeHE based off of KeHE’s list wholesale price. In instances where these are pre-agreed between the supplier and the retailer, it is important to hold on to any documentation of the agreement to avoid miscommunication between KeHE and the supplier.
How to Do a Price Change at KeHE
As is the case with item changes listed above, price changes are regulated carefully at KeHE, and their effect on Purchase Orders and keeping up with KeHE orders can be big.
Price changes for items being sold to KeHE should be done through the supplier portal, KeHE Connect.
From the KeHE Connect dashboard, select Products from the top nav’s dropdown menu, and select Manage Prices.
From there, suppliers should click Start Price Change in the top right corner, and download the template. This will download a spreadsheet of the current prices. After these are updated, the “next available effective date” should be updated to remain compliant with KeHE’s price change timeline.
These changes must be at least 90 days prior to the published price change effective date.
From there, in the same tab on Manage Prices, select “Upload File.” After a change has been submitted, suppliers will be prompted to resolve issues if there are any.
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