Monitoring vendors for compliance is, obviously, a key to both good business and good business relationships. Relationships between retailers and vendors are, at best, complicated and difficult; at worst, as many buyers have painfully learned, the partnership can become chaotic and nearly impossible.
All suppliers, including the ones who communicate in a clear and timely fashion, and who consistently deliver on time, need to be monitored. Compliance optimization, which includes tracking and identifying performance issues and communicating issues to suppliers, pays off for both parties. When supply chain problems are identified at a detailed level, addressed, and fixed, the retailer-supplier partnership benefits. It becomes more efficient and more profitable.
There’s no doubt that the old cliché “time is money” can be overused in business, in the sense that there are certain areas where the maxim just doesn’t apply. But when considering EDI (electronic data interchange) as part of digital operations, the phrase could not be more fitting.
While “outlier” is normally thought of as a statistical term, it perfectly represents an element of the supply chain that could be (1) physically separate from other elements of the supply chain; (2) culturally different from the rest of the supply chain. “Culturally” might include: language or work methods. Running an outlier tends to cause difficulties to the Supply Chain Management. Let's look at outsourcing as a solution.
Compliance problems that trigger invoice deductions are often the result of communications problems between suppliers and customers. Suppliers want to reduce margin pressures. They often make small changes to integration processes. And business changes can make initial incentives counterproductive. These (and other issues) are usually unique in their particulars.