Retailers and distributors run distribution centers and stores that depend on suppliers doing things the same way every time. Vendor compliance programs spell out those expectations, usually in a vendor compliance manual or routing guide, and they apply to every supplier that sells to the buyer.
Retail vendor compliance requirements typically cover:
- EDI documents, versions and timing, such as sending an ASN (EDI 856) before the shipment arrives
- Carton and pallet labels, often GS1-128 barcodes that match the ASN
- Packing, pallet build and case pack rules
- Shipping and routing, including following routing instructions (EDI 754)
- Delivery performance, often measured as OTIF
When a supplier misses a rule, the buyer usually recovers the cost through chargebacks and tracks the pattern on a supplier scorecard. For suppliers, the hard part is that every buyer has its own manual. For buyers, the hard part is getting consistent results from suppliers with very different systems and levels of EDI capability.