How to Meet Compliance Requirements and Maintain Retailer Relationships
October 28, 2020
Consumers dictate the marketplace.
If a particular item is piquing interest, consumer goods retailers, producers, importers and distributors react. Demand tends to shift rapidly. What was gathering dust one day is leaving shelves empty the next (see: Crocs’ unprecedented growth). The inverse is also true; what was flying off the shelves one day isn’t so popular anymore (see: the current status of the global beauty industry).
Shifting consumer habits, particularly in recent months, are likely a result of the coronavirus. The pandemic has not only changed what consumers buy, but it’s also changed how consumers buy. Which also means that retailer compliances shift as well.
For consumer goods importers and distributors, this is change on top of change. Importers and distributors are delivering differently to different people and, occasionally, shifting how and where their products are produced to meet consumer demand.
To meet compliance requirements and maintain your retailer relationships, you want a solution that supports the following:
- Chargeback Management – Regular chargebacks chip away at your bottom line, inhibiting your ability to be profitable. Chargebacks occur for several reasons: the electronic data interchange (EDI) documents were incorrect or late, shipping labels and paperwork didn’t adhere to retailer requirements, shipments weren’t on time or in full, the product was defective. This list could go on and on.
You’re able to measure, track, dispute and recover retailer chargebacks by utilizing the tools within your industry-specific enterprise resource planning (ERP) solution. The right ERP solution provides you with a workflow associated with these deductions and the ability to assign deduction reviews and approvals to specific individuals. You can share the list of deductions and corresponding details with all relevant peoples so you can better account for what those deductions may do to your bottom line.
You have greater visibility into the effect those chargebacks have on your organization when you use an ERP to manage your chargebacks. You can see outstanding deductions enterprise-wide. These deductions may just mean pennies on the dollar at the time, but they could mean a loss of hundreds or thousands of dollars down the road. An ERP can highlight where your business is in terms of resolving these deductions. A synchronized, centralized solution offers analytics not only on the chargebacks (by reason, customer, status, etc.), but it also provides analytics on how those chargebacks get to the point of being resolved.
- Electronic Data Interchange (EDI) Requirements – You likely need an EDI solution if your company sells to mass merchant retailers. EDI compliance introduces its own set of complexities and challenges, particularly when all your trading partners have their own set of unique rules. These days your customers are asking for more EDI documents, so it’s essential to have an integrated EDI solution to deliver these documents on time. Some of these EDI documents include:
- EDI 846 – Inventory Inquiry/Advice
- EDI 855 – Purchase Order Acknowledgement
- EDI 753/754 – Request for Routing/Routing Instructions
EDI solutions enable you to interact with your trading partners seamlessly and in real-time. You’re able to grow operational efficiencies, streamline transactions, improve collaboration and foster those ever-so-important trading partner relationships when EDI is built into your ERP system.
There’s another way to move beyond an integrated EDI solution, and that’s to have a vendor that manages your EDI services for you. EDI vendors help onboard new customers and usher them through training and validation processes. Vendors monitor daily activities, adjust maps, answer any questions that may arise and address pricing discrepancies that may be reported.
- On Time In Full (OTIF) – To successfully meet OTIF requirements, suppliers must do the following:
- Calculate for anything that could go wrong, including weather and operational errors.
- Anticipate consumer purchasing trends within lead times.
- Effectively balance inventory. You don’t want inventory to take up too much space in the warehouse, and at the same time, you don’t want to risk a shortfall by not having enough.
- Remain consistent in your deliveries.
Combining the power of a proper demand forecasting model with integrated EDI and chargeback management enables suppliers to reach that balance required in OTIF fulfillment. Users can meet even the strictest OTIF standards with a consumer goods ERP that allows for real-time decisions and visibility into every step of the shipping process.
Leveraging these tools gives users a competitive advantage, and it strengthens the relationship with their retailers. The best part of all? It makes the whole supply chain better. Everybody wins when products flow smoothly from producers to distributors to retailers. It’s maximum profits at minimal costs.
- Labeling, Branding and Packaging – All large retail establishments have vendor manuals that typically include 200 pages of guidelines on packaging requirements, delivery policies and how they expect their product to look when it arrives to a customer. You risk losing those large-scale orders if your company isn’t able to adhere to these standards. An ERP for the consumer goods industry has functionality built-in that manages complex direct-to-consumer shipping requirements to meet retailer demands while minimizing errors and associated costs.
The ability to automatically generate shipping labels based on individual retailer requirements or ship packages prepaid using a retailer’s shipping account within the ERP system alleviates the stress associated with shipping packages. There’s no more manual-entry, error-prone data, and the need to rely on individuals to apply each retailer’s rules correctly virtually goes away.
A consumer goods-specific ERP is designed to help you seamlessly meet current and emerging compliance requirements. Not only does this enable you to maintain strong retailer relationships, but it allows you to satisfy even your most demanding customers.
If you’d like to talk more about how Aptean Consumer Goods ERP enables you to leverage the tools within your ERP to optimize your retailer relationships and meet compliance requirements, reach out. We’d love to talk.