Understanding and Correcting Common SQEP Fines

Explore prevalent SQEP defects ailing Walmart suppliers with Peter and Danielle, and learn how to dispute invalid fines.

Transcript

[00:00:00] Danielle: Today, we are going to be talking about understanding and correcting common SQEP finds. My name is Danielle Gloy. I will be monitoring the chat today and then leading our content is Peter Spaulding. So we work on the SupplierWiki team, which if this is your first time hearing about SupplierWiki, We help create free educational resources like eBooks, articles, and webinars. 
 

Our goal is to make content that is going to be the most beneficial to you. And that is ultimately going to set you up for success. So really happy that you all get to join us today. So for the agenda, we have a packed one for this hour. We are going to go over SupplyPike's findings on the most common SQEP finds that we have seen occur. 
 

Then we'll go into deciphering the meaning of SQEP charges. So essentially, we'll go through what those different charges mean, which once you know what they are, you can learn how to prevent them or dispute them, which is what we'll be going over for a little bit towards the end. And then we will wrap it up with a live Q & A. 
 

A few FAQs that we typically get during webinars. The first one is, will we be getting a copy of the slide deck? Yes, absolutely. You can expect to see the PDF version of the slide deck, as well as the recording of this webinar, appear in your email inbox in about three to four business days. you can also find our webinar recordings on YouTube under SupplyPike, or you can find them on our SupplierWiki website, where you can download a variety of our slide decks. 
 

Second question that we typically get is, what is the best way to ask a question? So at the bottom of your screen, you'll see a Q & A tab that has two little text bubbles, and this is where we ask you to please submit any questions related to the content, as I will be able to monitor them and then tee them up for you. 
 

Peter for the Q & A time at the end. If there is a question that pops up that is maybe pertinent to the content on the slide that Peter is going through, I may pop in during the webinar, but for the most part, I'll be saving the questions for the end and last little thing, before we get into the content, if you are new to our webinars or have never heard of SupplyPike, We create cloud based tools that help CPGs reduce revenue loss. 
 

We do this in a lot of different ways and with multiple different retailers like Walmart, Target, Amazon, Home Depot, and Kroger. And last thing I will say here is we work with a lot of great suppliers. We have some of them up here today. And if you aren't currently working with us, we would love to see your brand's logo up here in the future. 
 

And with that, I will hand it over to Peter to get in today's content. 
 

[00:02:43] Peter: Okay, thank you Danielle. That was wonderful.yeah, so we, SupplyPike, we got our start a little bit more in the AP deduction space, doing deduction codes and all that. So our software really was designed with that in mind, but in more recent years, as we've filled out that space, we've begun to be able to expand into other parts of the Walmart retailer, revenue loss space, but also into other retailers as well. 
 

So a part of that expansion really was, whenever SQEP came on the scene, we could take a closer look at it, right? Look at the,the fines that people are receiving, look at the defects, how it's broken down into its different phases and then use all of that information that we've learned to aggregate data to do some benchmarking basically. 
 

So this, webinar is mostly just that. It's mostly justhow is your kind of fine process for SQEP, performing relative to the kind of average supplier. So a little note that I wanted to highlight. From this, slide is the categories in Walmart. We would like to think that our data that we have for this is based off of our current customers. 
 

We would like to think that this is pretty representative of, suppliers across categories. So we don't have a lot of very category specific, performance data for SQEP, or for sales or anything else, right? Like the kind of thing that you would,you that in the case of sales that you would find in Illuminate or something like that. 
 

but what this is more of a kind of a broad scope benchmarking. How is your particular business performing relative to that of the average, in this case Walmart supplier? so take all this with a grain of salt. your category may be different. It may be something that's a little bit,it may be a little bit, the,packaging is a little bit more tricky in your category relative to other people's, and so that number is going to get skewed in, in that range as well. 
 

That's data that we can't really speak to, at least not as of now, because we haven't broken our data down into individual categories. and I think that if we were to, we don't really have enough. We're in, all or most of the categories. We don't do. there's certain categories that we, can't really handle deductions for, like alcohol and tobacco and stuff like that, as well as,pharmacy stuff. 
 

So there's certain areas that we couldn't really get into, but really, as our customer base begins to grow, this is data that we can really flesh out, and I think in the future, We could do more kind of granular data by category as well. but for SQEP updates, we're going to do a little bit of kind of higher level SQEP stuff at the beginning here. 
 

Not too much though, because we assume that there's a little bit of an understanding of what SQEP is if you're here. But basically all of this is just to say that Phase 4 is still TBD as far as to the best of our knowledge. So we want to see if that rings true to you as well. where is phase four with all of this? 
 

the, in January we got a new version of the secondary packaging guide, the supply chain standards. there wasn't, phase four stuff in there. We're not sure if that's how they're going to make the announcement whenever phase four does drop. and, I suppose with The, supplier summit coming up here really soon. 
 

There might be a little bit more information about that then. so keep an eye out for that. but yeah, we haven't really heard, we heard whispers. We heard rumors about the beginning of the, the fiscal year this year, but that didn't happen. I heard whispers about November about six months ago and that didn't happen. 
 

whenever it does happen. everyone will know because your fines will go way up, and then we'll do a whole kind of, we can unpack all that together for you guys as well. but I want to I want to couch this conversation today, a little bit in those terms as well, right? 
 

Phase 4 isn't,isn't out yet. So when it does come out, there's going to be a whole lot of defect types, and sub defect types that come out as a result of that too. So it'll really shape the way we are, it'll really shape the way that we're thinking about all of this,process. but there's a lot of different ways that these finds are calculated in terms of the individual finds, or, if it's an automated process, there will be just a kind of flat rate fee for every defect. automation is changing all of this. It's something I usually am harping on a lot in these webinars. look out for that, brace yourself for that. and then we also have this massive unwieldy document that I've already referenced this, secondary packaging, supply chain standards, that makes it,and it's not even at the most granular level of detail either. 
 

There are some, more, regulations and rules that come into effect as well, but it's a very unwieldy, very difficult text to go through and to make sure that you're doing everything right. also the metaphor that I like to use a lot is just that Walmart is a, is like a little country, it's GDP is that, and there are so many different moving parts and pieces. 
 

Yeah, but, another part of the problem that we talk about a lot is just the way that retail link is structured in this more fractured way. there's a lot of different apps that have to be used in order to,in order to aggregate all of the information that you need and it can create something of a storm. 
 

So we're gonna start with some kind of just, higher level, numbers, data that we've pulled from, somewhere around 240 suppliers, And I think that is updated to be a little bit more than that too. But again, that number is not big enough to really get down into a granular level by category or by department or whatever but it is good to give a general sense. So out of those numbers, we see about 97 percent of suppliers get SQEP fines. and the ones who don't probably be on the smaller side. So most people are having. Some form of revenue loss due to this. and it's generally, more than, OTIF fines, in terms of suppliers who have received one, right? 
 

Of the suppliers who do receive them, there can't be quite a bit too. The 28 percent of suppliers had more SQEP fines, than OTIF on average. So again, SQEP comes in after OTIF, chronologically speaking, but for a lot of people it's a more devastating kind of form of revenue loss. And then, this is a big, I think, key takeaway. 
 

five of the defects make up 83 percent of the total fine. So five specific, SQEP errors are really key. are really the big contributors, to revenue loss in SQEP and we'll look at what those are and we'll talk all about how to investigate them, how to ameliorate it, how to make it better.

How to avoid them in the future and all that.yeah, and again, this is across all categories. It's not just, it's not limited to one. 
 

So this is, this is more recent, SQEP find data in the past when we've done, when we've reported on this.We started with the very beginning of SQEP and and showed how it progressed from just PO accuracy into some of the others as well. but now I like this graphic because it gives you a little bit more of a sense of how SQEP has stabilized, over time. 
 

I say stabilized because there's quite a bit of change there as well. These numbers are just based on our sample size. So those aren't, those are not, the, average fines that an individual supplier is receiving. it's just what we were looking at across the whole thing. One thing too, I think that is, that I would like to, that I would like to just point out is that for SQEP and OTIF, the fines do matter. 
 

Sometimes they are, they are really big, but compared to something like shortages compared to your average kind of AP deduction. It's not the total cash value of the fine that's really, being damaged, that's really damaging so much as it is the relationship with the supplier or your like standing with Walmart, right? 
 

How competitive you can be in your category with other competitors. what Walmart is looking at in part is really stuff like SQEP performance, OTIF performance, right? They aren't as devastating from a just a kind of purely accounting finance perspective, though sometimes For some people, it, for some suppliers, it really can be, for the most part, what you're seeing, what we're seeing is just that, it's something that can be really beneficial to your relationship with Walmart. 
 

if you can, it's something that you could point to, to be like, this is, how we're doing, right? Along with sales data and other stuff like that, the scorecard. all of this is really important. I just want to break down here a little bit. we see load compliance, almost every month takes up a relatively small portion of the fines. 
 

pallet compliance is pretty small too and pretty steady over time. the big one, and it also is one that varies quite a bit or seems to vary quite a bit is case compliance. So we'll be talking a lot about that. And then PO accuracy is pretty big too. but it is also, it is also stabilizing in terms of its numerical kind of value. 
 

So some of these like load compliance and pallet compliance. These are things that if they are indicative of an actual error, they can be isolated and found out and fixed, with relative ease. So that number that we're looking at there as it's stabilized over those years, that may be just newer suppliers. 
 

Seeing a lot of pallet compliance, like poor pallet build or something like that, Seeing a lot of those finds over time, is a red flag and I would treat it as a root cause issue where you can get to the bottom of it and you can find it and then you can improve that and move on. so that, that would be my guess about why those numbers are stable. 
 

PO accuracy is is somewhat trickier and then case compliance is a lot trickier. Those, case compliance, regulations are changing every year. we just, I was just, on a call with someone who's been, every single one of their inspected cases got a fine for the month of, for the month of March because there was an update, and, and they hadn't been aware of it. 
 

so Walmart isn't going well out of their way to let everyone know whenever these updates happen, they're just communicating it in the form of compliance fines, It's a bummer. It's a major bummer. these are the, the top five. So it looks like it's just three, but these are really the top five, defects that we see in SQEP. 
 

This, that dollar amount is arbitrary. it's relative to a different number that we were looking at. but the percentages there are the real value. we're seeing two really big, defect types. one of them belongs to barcode compliance, and the other belongs to PO accuracy. again, to just contextualize this a little bit, barcode and label compliance, those belong to case compliance. 
 

And then po accuracy is the, is the, a SN not downloaded in overages, right? So these are, these are the five big ones, and they both belong in these two groups. So the way that they're categories on categorized on this slide is the green and the blue. all five of the biggest defects, exist in those two, categories in that breakdown. And what we see is really just a quarter of all SQEP finds is the incorrect quantity on barcode compliance. And we'll get into more of what that means and why that is a little bit later. it's really, everything's all about quantity and the communication of quantity. 
 

ASN not downloaded, that's some outdated language, or at least, we think it's some outdated language. ASN Not Downloaded has been broken down into two categories now of I think it's like an incorrect ASN, incorrect amount on ASN, and then ASN not sent. So that's Walmart trying to do a better job of getting more granular about what the actual problem is. 
 

And I really appreciate that because ASN Not Downloaded I think is a terrible name for the thing that it's actually describing. we'll talk more about what that means in a little bit later. But that ASN Not Downloaded, you can think about it as all of the ASN related, finds for SQEP. And then overages, are pretty self explanatory and those overage finds, it's a big one. 
 

It's a big whammy. Got incorrect barcode under barcode compliance, then incorrect quantity as well for label compliance. And we will dive into them now. Okay. SASN Not Downloadeded, this is the one that I was saying has been now broken down into two different, subsets. To the best of our knowledge, ASN Not Downloaded may still exist as a fine, as a sub defect, but we haven't seen any of them yet. 
 

So I think what's happened is they took all of the ASN related fines, and those were called ASN Not Downloaded, and now it's about the quantity on the ASN and whether the ASN was actually sent or not. So that's the new kind of, way that it's broken down. And, so,this is Walmart's definition of this. 
 

It's it's outdated as well. ASN not sent or ASN failed to download. The failed to download part now Walmart has completely just gotten rid of, which is a good thing because, that seemed to imply that there was a fault with the EDI provider. and then that usually resulted in some confusing conversations between suppliers and their EDI providers when in reality, most of the time, it's a timing issue, right? So ASN, hasn't arrived. That's Walmart saying by the time we got this shipment, we hadn't received an ASN yet. And that can happen sometimes. but if the ASN quantity is what's wrong, then that will be a different thing entirely. 
 

That's a miscommunication about. on the supplier's part about how much they're actually shipping. so that's what the second line is here. ASN was not received for a PO line or wasn't sent before the shipment arrived. sometimes there's miscommunication. Sometimes people aren't, the people who are sending the ASNs aren't sure when the shipments are actually leaving or they're hearing about it late, yada. It could be any number of things. but the charge for this is a, $200 flat, fee per po, for DSDC in department 38. And then, for all the rest it's a $25 flat fee,per po. So it sounds like it's not a lot, but you can see it's still making up a significant portion, of the quep related fines. So it's something that could really add up. 
 

Overages. I want to zoom out a little bit. Overages are potentially the most confusing thing in this whole process. But what we're talking about when we talk about overages here is really overage finds. we're not talking about billable overages. And it is really important to, to think about both of those things as overages, but to not get them confused with each other. 
 

It's a very, it's a very, difficult,it's a deceivingly complicated thing. but whenever you overship, You will receive a fine, a SQEP fine, to Walmart. You'll receive a SQEP fine. that is the 200 per defect and then 1 per impacted case. that's the individual charge. but overages should also be thought of as opportunities for billing Walmart for the things that were overshipped. 
 

Because what will happen in that context is Walmart will only pay you for what they received, and they'll hit you with a SQEP fine for an overage. And the SQEP fine is bad, and they are costly, but it is a blessing in disguise because it is Walmart's way of paying you. of, cluing you into the fact that they have stuff that they haven't paid for yet, and you can usually invoice for it. 
 

So,these overage fines can be seen as a blessing in disguise, because they're pointing out that there are billable overages that exist out there. And what we've seen a lot of the time is that Walmart will actually pay, if you invoice for, a billable overage, Walmart will usually pay for it. 
 

it's not, your SQEP score won't improve, as a result of it, but, but you will be able to get paid for the stuff that you've given Walmart.there's all that.receiving errors are common at Walmart. This is an important thing to shout out here.yeah, avoiding overshipping is a good idea, but we do see a lot of invalid overages in terms of fines, but also in terms of,billable overages. 
 

So it's helpful if these can be, if these can be paired with shortages, but all of that is a very difficult process that unless you have something like SupplyPike, it can be very difficult to trace it all down. but. that's another kind of thing that we would like to call out with overages is that, oftentimes there's a miscommunication between Walmart and the supplier about how much is going where and they will perceive that they have been,short shipped here and over shipped here when in reality,that was what was agreed on originally, and you can use that information to, win some of that money back. 
 

these aren't always, these aren't always legit. oftentimes it is an indication that, that you can bill Walmart, for the stuff, for the extra stuff that wasn't, that was shipped. But not always. Okay, so incorrect barcode.what is it? this is covering kind of three main sub defects. Wrong format, incorrect quantity, and incorrect barcode. 
 

So we're going to go through, each of these. Incorrect barcode has varying definitions depending on how the issue is found. normally,the charges are usually broken down by automation and inspection. because not everything is automated at Walmart yet, at least not like it is at Amazon where, their FCs are just crazy automated. 
 

so,in the automation case, the correct format for the item configuration doesn't match the OLIF or Item 360, the actual item setup. so if the wrong format is scanned, then they'll be able to tell you that, right? But if it's not, then it could be that there's no barcode when in reality there might be, it just maybe isn't being noticed. 
 

So automation will work differently, whereas in the case of an inspection, they'll usually be able to say whether it's a wrong barcode or not. If it's a wrong format, if it's just an incorrect quantity issue, or if it's actually the wrong barcode. So they'll be able to distinguish that a little bit more clearly there. 
 

One thing that we've been calling out a lot, we're seeing a ton of these fines. We're seeing a ton of these,what is it that we called them? Case packaging.how do we break it down? Case compliance. so case compliance fines are taking up the majority of them and we think that we're going to continue to see that happening. 
 

We don't know exactly what this fourth phase is going to look like at what point. that, at what point in the supply chain it's even going to be located at. But one thing that we're sure of is that Walmart is trying to make their DCs more automated every day. And as they do that, the number of fines and the number of dollar, the dollar amount of fines even goes up. 
 

So one thing I want to call out here really quickly is just that. With the automation charges, the charges that are developed based off of automation, 1 per case impacted, and that's a flat fee. for the inspection, you've got this massive 200 admin fee that is put on top of the 1 per impacted case, charge. 
 

it seems like those inspections, are going to be a lot more costly than automation, but it's actually not the case. Remember that whenever Walmart is updating something like a, let's say a barcode format, rule or something like that, basically the way that most people find that out is through these fines that will come through automation. 
 

So you'll be getting a dollar for every impacted case until someone on your team can pinpoint it, can become aware of it, And then from there,infer what the change in the policy is. and those changes for formatting, happen all the time every year. and even, and even less than that too.

So,yeah. This is something that we really, we talk about a lot, but it's hard to talk about without getting into really the specifics of which particular barcodes, are important. Where, so we always recommend You know, studying the secondary packaging guide and using the, Ctrl F search function there to try to find exactly what your particular situation requires. 
 

and then in the case of invalid finds, It's mostly for the, manual inspection, that, or those are the ones that we see the most kind of invalid fines for. And the way that you can really determine their validity is by looking at your FIXit tickets, which I don't think we're going to be talking about very much today. 
 

but FIXit is a very important app for, for understanding, the granularity of what went wrong in this particular instance. And that's because FIXit is where they upload the images, as well as they include some of the other information about the client itself. so little shout out in FIXit, you can actually dispute these basically in app using the chat function, by asking the right questions. 
 

If for example, you're seeing a picture of shipments that aren't even your own. you can just point that out in the chat function and it should get erased for you there. but for the most part, all of your disputing has to happen in high radius. Barcode compliance incorrect quantity is categorically different from the incorrect barcode problem. 
 

This is much more about the kind of miscommunication that happened between Walmart and suppliers about the amount ordered or about the amount shipped. and those expectations not being aligned, but the charging is exactly the same.and, this is another one that we'll see go up, a lot with, the implementation of automation at these DCs. So you can definitely expect an increase in issues. and FIXit is really important for this as well. 
 

Okay. For label compliance incorrect quantity, this is oftentimes the issue comes down to the barcodes are actually correct, but there are not two on the correct sides. So that's usually what's going on here. The charge structure is exactly the same as the other ones, and, it is preventable.we say, increase, expect the same amount of increase in issues and fines, as you would for the barcode, defects as well. 
 

but again, we'll call out the Secondary Packaging Guide and the FIXit app for that one as well. Okay, so we wanted to break this down into three different kind of, categories,for doing well in SQEP, something that we've seen, suppliers excel at, versus, areas that we've seen people struggle in. 
 

So we want to think of, we want to disabuse suppliers of the idea that, you could take an AP deductions, policy and apply it to SQEP fines. Basically, disputing is the last resort. Disputing,is not as effective for SQEP fines. it's not as effective for OTIF fines, any kind of AR chargeback as it is for AP deductions. we see a lot of success, whenever people can prove the invalidity of an AP deduction in actually winning money back. for SQEP fines, most of the time what we're doing is we're trying to catch up with Walmart's programs and we're trying to, fix inefficiencies in the supply chain,the first step that we want to call out is the understand phase. 
 

From there we're gonna go to a prevention phase, and then we'll talk about disputing, as well. But, here, we want to call out the, scorecard for performance, just checking in on your performance at a reg at a regular interval, weekly. But again, it depends on what you're doing. It depends on what your role is. 
 

for some of you, it may be more important than for others. And, but I guess the main point is to not put it off until it's too late. because that will be a good idea. That'll be a good way of gettinga bird's eye view of. the compliance performance throughout the company. And then understanding the reason codes is obviously really important. 
 

How Walmart is gathering the data and how they're fixing the issues. Whether these are automation fines or inspection fines, all of that is really important for understanding that too. And, For our second step, this is the prevention step. We really want to highlight the FIXit app. I know I've been talking about this a little bit already, but you should review before the business review period to prevent having to dispute through high radius if you can, or to gather additional information for disputing. 
 

so FIXit will be helpful whether you use it as a kind of platform or not, because it'll give you, visuals, It'll provide a little bit more information on the actual defects themselves, what actually went wrong on the,on the ground. And, but again, in the, I want to call out in the bottom right hand corner, there's a chat function and you can use that usually if you ask one specific and pointed question, you can use that as a way of getting some kind of information back from Walmart Corporate about what went wrong, right? 
 

Walmart wants to see that you are making an effort to,to prevent this from happening again in the future. And so you're going to make a change. sometimes they're invalid. Sometimes the information that they give isn't specific enough. And that chat feature can be very good for helping to clarify exactly what's going wrong. 
 

yeah,The, that's the first bullet point there really is just about making that a very specific question. trying to be as precise with your wording as possible, because you're basically only going to get, one shot at a response. it's, you can't keep a conversation going with Walmart corporate, because they've got places to be. 
 

Another call out, that we have is, learn how to understand Walmart's copy and paste responses. And then, as I already mentioned, you're basically only going to get that one question for that chat feature. so try to use it as wisely as you can. And then in, the disputing portion, disputing proper for SQEP fines, happens in high radius. 
 

you want to take time at the end of every month to, to try to dispute these fines, or the ones that, or to try to do some validity checks on them. Again, this is pretty rare. Most of the time, the benefit of a SQEP find, or, it's not the benefit of a SQEP find, but SQEP finds are actually helpful for understanding, things that are not up to standard. 
 

Up to snuff, right? It's a way that Walmart has of communicating very aggressively with suppliers about changes that need to be made. you can leverage FIXit to try to,to determine validity, to try to get a sense of what's happening there on the ground. And then you can also use it to gather the basic information that you would need for filing a dispute. 
 

it might be a good idea just to download those pictures. If you're going to dispute, a fine, it may be a good idea to just download those pictures and attach them anyways, even if their relevance, maybe isn't super important, just to show whoever's reviewing that. Dispute, that you have done your homework in that sense too. 
 

but yes, FIXit is still, FIXit is very important in the prevention, period. that's the name of the app. Walmart wants to see that you're actually trying to change things, but it's an important part of disputing as well. And, of course, the SQEP dashboard can be very helpful for disputing too, for get, for gathering some of that information. And for contextualizing it that way. So a little bit of,the higher level, the invoicing schedule. This is the 21st of the month. That the prior month's data, in the SQEP portal gets locked. That's important to know because, it can change before then. And then the 22nd and the 27th through the 27th of the month, is the business review period. And, it's the 28th of the month that starts the kind of financial processing period where the billing is generated for all the suppliers. 
 

So that's, that's the process, the process is started where the actual AR chargebacks, are being generated. And then, the amounts due based on billing are just deducted from the next scheduled outgoing payment. so all of that, getting all of that kind of outlined, from an accounting perspective is really important.we decided to break this down into some workflows to just again, have a kind of a higher level view,of what's going on here and how it may change depending on the phase or depending on the actual,sub defect. So you're going to want to be constantly reviewing this scorecard, the SQEP scorecard, for those finds or for projected finds. 
 

And then depending on the phase, you'll use different, apps. So you'll use a chargeback summary for phase one, because all of that is, is electronic. It's more PO related. But for phases two and three, you're dealing with the actual stuff, the actual material of the shipment, the actual, barcodes on the boxes and all of that, right? 
 

that has to be reviewed in FIXit for that reason, because they will, that is ideally where they would be showing you, what's going wrong. we have had instances of people not receiving images in FIXit and that creates a whole lot of trouble too. but the chargeback summary will also, again, probably be helpful, for gathering some of that information if it's not all available in FIXit. 
 

From there, you've got to do your validity checks.so you can determine whether you want to eat it or whether you want to try to dispute it, whether you want to write something off as an error, basically, on, on your part. that will all get taken back up into the individual kind of financing for the full year. 
 

How much should we expect to be fined from Walmart through the SQEP program for our own inefficiencies? Does that change on a seasonal kind of cadence, or is it pretty predictable throughout from month to month that there's around the same amount? Or is this something that we're seeing really just explode whenever there's changes that Walmart is making? 
 

If that's the case, then we're trying to figure out what's the cadence of the changes that Walmart is making, and how can we prepare for that, from an accounting perspective or a finance perspective. yeah, that's, I say all that we have there for if it is valid is just write it off. 
 

But all of that kind of goes into that process as well. It's not as simple as, as all that. and it's never,a good thing to have to work with a boss on. but that's that, for the invalid fines and again. It's almost wrong to think of it in terms of like the end point is actually disputing, but there are instances in which that's the case. 
 

Walmart has paid back SQEP fines that have been invalid in the past as well. all of that, is there too, but that's when you gather your proof and you dispute it in High Radius or you can try to get it taken care of in FIXit as we mentioned already. We'll talk a little bit about what High Radius looks like there in a little bit. 
 

But the final step, even though prevention is the second portion that we talked about in this last section, prevention has to be this kind of recurring part of the whole process. So with each invalid find or valid find, whatever it is, saving the documentation and sharing those learnings with across other teams in the company, whether that's other retailer teams. 
 

Or whether that's other kind of functional teams within a single,retailer team. all of that can be, is, can be really important and should be done. because even if you're receiving invalid fines from Walmart. That's something that you're going to want, to know about at a company and to keep,and to keep metrics on, basically. 
 

how often are shortage, deductions invalid? How often are SQEP fines invalid? are the PO fines more, more or less likely to be valid or not, right? So speak of the devil, ASN fines. the only thing that we can recommend that we've seen justwork to help people reduce these fines, basically across the board is just making sure that the ASN is sent before the shipment arrives at the DC. 
 

That's, the most,the clearest way of actually talking about it. and then the recommendation is to send as trucks are leaving the ship point. but yeah, that's, it's, if you're working at a supplier where everything is prepaid or where everything is collect, you could create a one size fits all program for the ASNs for when they're sent. 
 

You can send an ASN too early. so all of that is, is pretty tricky and it has to do with what's the kind of diversity or variety of shipping methods that you have that can create a lot of complications with that problem, which can also result in fines. so you, this is, again, you'll dispute in high radius. 
 

this is one that you can't co opt, through FIXit because, it's FIXit is only dealing with phases two and three. Fines and ASNs, are completely under the po bucket, meaning it's just an, it's just an electronic thing. It has nothing to do with actual, material objects that are being shipped, whereas, phases two and three, which is what it is for, is entirely about that. 
 

it's all gotta be done in high radius. And then we've just included some. of the information that can be most helpful here. Obviously ASN information does qualify as proof documentation in this case, but your EDI 997 Accepted Acknowledgement is really going to help because that will, Or it can help.

I've heard that it's not always, specific enough. It doesn't always contain enough specific information about the arrival of the ASN, in terms of timing. but it should, it does show that something has been received by Walmart's EDI, and so it is relevant for that as well. So that's a little call out for that. 
 

for overages, These are just for invalids. So you would only ever dispute an overage if it is actually not true. Walmart is saying that we received over, but they really didn't. most of the time what that would mean is that they ordered, more than they thought they ordered. So they think that they're receiving over, but really they're not. 
 

so for prevention,using different colored stickers on boxes, that are from different POs. but that are all together in one place can help. That's something that we've seen happen before. You can confirm the, fulfillment information. is correct, is correctly flowing to the warehouse by checking your EDI, and then you can confirm that your items are set up correctly. 
 

yeah, the, an incorrect item setup creates a multitude of woes, as you all know. are well aware. And this is just one of the ways that can be negatively affected. So this is also going to be submitted in high radius because it is also technically a PO accuracy issue, even though it is dealing with the stuff as well. 
 

But you can find a lot of these by following shortages. Sorry, by following invalid shortages. If you guys have a much more developed system for identifying invalid shortages, that's great. follow those to see if there's, if they're connected to invalid overages in other places as well, because that's maybe what's happening is, there's just two different quantities that are screwed up. 
 

If it is correct, talk to your buyer to dispute with,with the information about the shortage in HighRadius,DSS or Luminate data, can be used to match up invalid overages as well, using that same method, so watch out for that. Alrighty. And for all of these, we've lumped them all together here before going into HighRadius. 
 

but these are the other big three and there's a lot of other ones as well. but big kind of call out for prevention is just that Walmart requires two properly formatted labels on each carton with at least one placed on the longest side. so that's a big one. We still see that all the time. 
 

those fines coming through, include required details like GTI and barcode, Walmart item number, supplier stock number, et cetera. and then again, with item setup,if it's matching the barcode there, that. that will,help you avoid a lot of issues. so you can assign the FIXit ticket back to Walmart, with the reason if it is invalid and if it can be talked about there. 
 

And if that's the case, and if they acknowledge it, then sometimes those FIXit tickets just disappear. and they don't turn into, and you don't end up getting fined for them. but if not, then you have to use that information that we talked about before, usually images from FIXit, to, to dispute those. 
 

we've seen it happen before where there's an incorrect quantity, barcode compliance fine, and you can see two barcodes on it in the images. And one is on the longer side. It's weird, but it's happened before. And in that case, you could use that image as proof documentation in a dispute. So how would you actually do this, in HighRadius? 
 

there's two different sort of categorize, categorizations,for where you'll see these. Charges, and it's OpenBills and ClosedBills, but this, is just either the ones that have been paid off or matched, and then the, those are, with their transactions, those are the OpenBills, and then after they've been, matched,those bills are closed bills, but both can be disputed and we call that out. 
 

Some people think closed bills can't be disputed, but, just a kind of, fair warning. this is the dispute.you basically just have to fill in the information for dispute reason, amount to be disputed,you attach the relevant documents, and then of course you can add comments there. if necessary to. 
 

you then want to follow up on or edit these disputes. that is all there under the disputes tab, of course, on the home screen. And we want to call this out. I've been talking about overages a lot, because of the way that these are piled on top of others as well. the, a single kind of misunderstanding, whether on the supplier side or on the retailer side can result in three different or four different even kind of forms of revenue loss. 
 

the example of an overage, I think is a good one where you. You send Walmart exactly what they ordered, but the perception is that it's, it's overshipped. In that case, you would receive a fine for it, for the, PO. In the case of actual overshipping, you would receive, a fine for PO compliance. 
 

You would also not get paid for the stuff that you overshipped, which you would then need to invoice for if you weren't aware of. And it's possible too that could be connected to a shortage somewhere else as well. all of that, again, depends on validity. It depends on who's at fault. 
 

but they can really add up over time. So we want to call that out. We always want to call that out. And then, we include these here too. I think that the Academy references, or the, these first two bullets here, the RetailLink Academy is probably going to be considerably more helpful than the actual support. 
 

we just hear from people all the time that there's no one really on the other end of these, emails or these phone numbers. That's not to say not to try it. you may,the EDI help desk, has helped people in the past. but by and large, what we see is that, the people who are in charge of doing support for these things are overwhelmed,another. 
 

Call out that I would make for SQEP related help. And all of this is the Walmart Supplier Support Group. there's about 14, 000 people in there, a lot of suppliers, a lot of brokers. There's some Walmart,employees in there who are, it's their job to go through and answer people's questions. 
 

but it's such a massive group. There's so many people in there and there's such a great conversation that's happening all the time, that there's normally, going to be a lot of help for whatever the issue, is that you're having. At least, some people to point you in the right direction. 
 

so that's something that I would, reference as well. I don't see any questions in the Q & A or in the chat, so hopefully that means that it was all going well. But if you, if you have any lingering questions or if you would like for us to dig into one or more of these phases or a particular kind of defect, we can do all that too. 
 

So we'd love, your feedback. our emails are up there and you can also find us at supplypike.com. Alrighty. 
 

[00:43:56] Danielle: Thank you all for joining. Hopefully we'll see you next time.

Hosts

  • Peter Spaulding

    Peter Spaulding

    Sr. SupplierWiki Writer

    Peter is a Content Coordinator at SupplyPike. His background in academia helps to detail his research in retail supply chains.

    Read More
  • Danielle Gloy

    Danielle Gloy

    SupplierWiki Researcher

    Danielle is a Content Coordinator at SupplyPike. Her supply chain degree helps inform her research and writing on SupplierWiki

    Read More

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Understanding and Correcting Common SQEP Fines

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