Every retailer has different demands that it makes on its suppliers, some, for example, putting a higher emphasis on compliance rather than shortages or whatever specific issue that affects your business. At Home Depot, there are a few common pain points that can be turned into learning opportunities for best-in-class suppliers.
Invoicing Best Practices
Invoicing correctly and efficiently is at the heart of supply chain performance and supplier accounting. At Home Depot, this can be particularly difficult.
With the exception of Direct Import, all invoices must be submitted electronically; paper invoices will not be accepted. All invoices must be submitted through the MP-SSP, however, submitting invoices in this manner may lead to a $50 processing fee.
To avoid the possibility of this fee, electronic invoices can and should be sent through EDI. Alternatively, they can be sent through the browser-based Sterling WEB Forms or Commerce Hub for .com/Special Orders.
Invoicing Requirements
- Invoicing at Home Depot relies on the accuracy of the following:
- Purchase Order Number (a valid 8 or 10-digit PO number)
- Facility or Store Number (valid 4-digit number)
- Payables-Vendor Number (note: P-Vendor number is the cumulative of all M-Vendor numbers)
- Dollar Amount
- Invoice Number (10-digit limit)
- Invoice Date
- Valid shipment tracking including SCAC carrier code, BOL Number, Pro Number, or Small Package Tracking number.
The invoice matching system will not be able to match (and therefore pay) an invoice if any of the above information is inaccurate, incorrect, or not included. When the automatic process doesn’t work, a more manual process is put in place that results in revenue loss as well as delays in payment. See this eBook’s Invoice Matching and Disputing POD Invoices section for more information on the subject.
Invoice Transmission Outcomes
There are four different outcomes for an invoice after it has been transmitted:
Systemic Match and Pay: EDI transmission was successful and the unit cost matches the KeyRec quantity. Paid invoices can be viewed in MP-SSP in Paid Items or are visible in Open Items with a net due date.
EDI Transmission Failure: Your EDI partner will receive a notification indicating the error. Home Depot expects correction and resubmission of the invoice. Timely correction is advised, as invoices aged greater than 12 months will not be accepted and thus will not be paid. Having clear communication with your EDI team is key to avoiding this issue.
Match Out of Tolerance (MOT): KeyRec has been matched, however, it has been matched with either a shortage or pricing chargeback. The invoice will remain in MOT status until the shortage/pricing chargeback has been finalized, after which time chargebacks can be disputed in MP-SSP. Short payment for the invoice will be distributed.
No Match Found (NMF): An invoice has been sent, but Home Depot does not have a KeyRec for the product(s) on the invoice. NMF status, if no goods are KeyRec’d, will end in a POD Dispute. A hyperlink will become available in MP-SSP, and suppliers can dispute providing documentation showing proof of delivery.
Rapid Distribution Centers (RDCs) and the RDC Network
Another unique feature of Home Depot as a retailer is their Rapid Distribution Center (RDC) Network.
The Home Depot Rapid Deployment Center network was implemented to help move product more efficiently from Home Depot’s suppliers to their stores. The RDC network allows Home Depot to more adequately assess individual store needs and make consolidation decisions prior to final distribution. The RDC network accommodates full truckload, parcel, and LTL shipments.
When shipping products through the RDC network, there are some requirements to be followed to ensure your product is getting to its correct destination and that you are meeting compliance standards.
RDC vs IFC
If you are shipping through the RDC network, there is a chance your shipment will travel through an Inbound Freight Consolidation center (IFC) before making it to its destination RDC.
In order to be onboarded into the IFC network suppliers must be shipping non-hazmat, palletized freight, and utilize UCC128 labels. Most of the processes at the IFC’s are automated. Failure to comply with IFC automation standards result in returned product at the supplier’s expense as well as negative impact towards the RDC Scorecard.
Understanding Home Depot POs
When Home Depot aggregates store orders, they will assign an RDC specific PO number. This PO number is structured differently than normal PO numbers.
Similarly, though, the first two digits of the RDC PO number can be traced to a specific buying office. The third digit of the PO number will be a “9” if the PO is for a host order. The last 5 digits of the PO number are internal control numbers.
Suppliers shipping through the RDC network will face exceptions on an order if a special or new store order is placed. Those orders will be DTS, direct-to-store.
Host orders for stores that are serviced by an RDC will travel through the designated RDC before arriving at the store. In these scenarios, the PO will be denoted with the RDC’s last two digits as the leading two numbers in the PO number. For host orders where a store is not serviced by an RDC the PO structure will not change, and the order will ship direct-to-store.
Shipping Guidelines
To prevent your ASN accuracy metric from suffering on your RDC compliance scorecard, it is important that ASNs are being transmitted, on time and accurately, when the trailer has been sealed and no later than when it has left the supplier’s facility.
If an ASN needs to be modified, suppliers must do so prior to arrival at the RDC, given the speed with which items are meant to move from RDCs to stores. Suppliers must select a new BOL and Freight Bill Number for the load and update it on the new ASN. Failure to comply with this regulation will result in the rejection of the ASN by Home Depot’s system. The supplier must notify the RDC inbound coordinator of the change and provide new and old BOL numbers.
When shipping to an RDC, the destination on the BOL must be the destination RDC. Suppliers should not combine multiple destination RDCs on the same BOL. Suppliers should not have multiple RDC destinations on the same pallet. If your shipment will be routed through an IFC prior to arrival at destination RDC, then there are extra steps that need to be taken to ensure proper receiving at the IFC.
If shipping truckload (TL) through an IFC, in addition to BOLs with destination RDCs, you will need to provide a Master Manifest. The Master Manifest should detail the number of pallets per PO. If shipping LTL through an IFC, in addition to the BOLs and Master Manifest, you must also include an IFC Master Bill of Lading. The IFC Master Bill of Lading is a requirement of Home Depot’s core carriers and is a replica of the Master Manifest, but in a BOL format.
In addition to that required documentation, suppliers must also make sure that the appropriate IFC Pallet Placards are placed on pallets and are always facing the rear of the truck when loaded. Lastly, suppliers must utilize UCC128 labels.
It is important that suppliers follow Home Depot’s guidelines when it comes to loading trucks. If pallets are not wrapped, stacked, and placed appropriately on the truck, this could result in mis-receiving as well as loads that shift in transit. If a load has shifted in transit due to non-compliance, Home Depot will refuse the shipment at the IFC or RDC and return at the supplier’s expense. The supplier will then be responsible for re-shipping via Prepaid.
UCC128 labels should be placed over shrink wrap halfway up the pallet load. Labels should always face the rear of the trailer to optimize reception at the IFC/RDC.
An important note for suppliers, your shipment will not receive a unique KeyRec number until it has reached its destination RDC. To reiterate, your shipment will not receive a KeyRec at an IFC. This is why it is important to follow all shipping guidelines to better guarantee successful receiving at the destination and to mitigate shortage deductions.