Ask Mary: Creating a Supplier Compliance Program (Part 2 of 3)

    As promised in part 1 of this 3-part series, below is a list of key points that will provide you with a solid foundation for establishing a compliance program.
    Survey your Vendors  
    The survey should be very simple and the goal is to determine if your vendors are already EDI capable. The survey should contain no more than 10 questions. Keep in mind that people are busy and do not have time for a lengthy survey, thus if you keep it short and simple you will get better results.  

    Implementation Plan  
    Establish a timeline for implementation with the following:

    • Technical and business contacts named and assigned responsibilities for their areas of expertise
    • Accountability of technical and business areas to meet their timelines

    Developing a partnership with your suppliers is necessary to maintain a good working relationship.
    As in any relationship the key is to communication. Enact the following:  

    • Retailer website bulletins to inform of new processes or changes to existing documents
    • Quarterly meeting via conference call or onsite with suppliers
    • Outreach to suppliers via email or phone to discuss any immediate issues Ask Mary scorecard

    Educating your vendors on your business requirements will help reduce errors for the vendor and help you cut costs in receiving your merchandise. It will help you cut down on out-of-stocks or receipt of incorrect merchandise. Education can be handled by having a supplier summit or simply a webinar to help introduce new documents or processes. Provide the following: 

    • Education on current specs
    • Education on all  new documents
    • Education on shipping and transportation requirements
    • Education on how to avoid chargebacks
    • Updates on important changes

    Suppliers should be tested to ensure that all documents that they transmit are correct.
    Documentation of testing should be kept to provide proof that the vendor can transmit correct data.
    This documentation will be used to help resolve chargeback disputes. You should do the following:    

    • Provide rapid response on testing
    • Provide support on answering questions on test data errors
    • Provide documentation of all tests to provide foundation for future compliance requests

    Suppliers require support to get help transmitting their data correctly or to get answers to questions on data elements. Thus support can help prevent errors from occurring or help resolve data issues. Consider the following:  

    • Provide vendors with live support
    • Provide vendors rapid response to help assist them in correcting data errors

    The scorecard is necessary to measure your vendors’ compliance, and therefore has become a critical part of doing business today. Suppliers will require a scorecard that clearly illustrates their standing with the retailer. A successful scorecard program has the following:  

    • Dashboard that can be accessed by compliance managers, retailers, and vendors
    • Weekly updates on the scorecard that will provide current chargeback information
    • Scorecard metrics that provide a measurement of your vendors’ compliance with current business requirement

    If you have any questions concerning supplier compliance and its importance, please contact me at
    -Ask Mary