Reducing Retailer Compliance Penalties

Stephen DeAngelis

June 17, 2010

Last month Enterra Solutions hosted a webinar entitled “Retailer Compliance: Accentuate the Positive, Eliminate the Penalties.” Highlights from that web event have now been published in the Consumer Goods Technology (CGT) Newsletter which I have included in full below:

Retailer Compliance Penalties: How Conair Reversed the Trend

Suppliers and distributors face increasing penalties for failing to meet ever stricter retailer “must-arrive-by” delivery windows. With each retailer free to establish its own requirements, suppliers and distributors face increasing complexity as they try to optimize their order fulfillment process. The answer does not lie in traditional processes and technologies. Fortunately, a new approach is available.

On May 25, 2010, Conair and Enterra Solutions partnered during a CGT Web seminar to create a process that keeps track of retailer requirements and automatically checks new orders to identify potential fulfillment challenges.

During the Web seminar, John Mayorek, senior vice president of Operations for Conair, and Stephen DeAngelis, CEO/president of Enterra Solutions, explained how technology has helped Conair fight back and save millions of dollars. They were also joined by Lora Cecere, a partner in the Altimeter Group. Lora shared results from recent research on the state of the industry on retail compliance. Here are some highlights from the Web event:

  • — Through interviews with 30 consumer products companies, Lora Cecere revealed that seven out of nine companies are facing an increase in shipping compliance fines. The greatest compliance issues came from mass merchant retailers (Sears, Target and Wal-Mart). Lora explained, “The rise in compliance is substantial, it’s growing and it’s becoming more complex. When we look at the last five years, retailers wanted compliance in physical shipping — things like advanced shipping notice, or box compliance and marking or the selection of carriers. But what we see in 2010 is them upping the ante. Fulfillment is the new news.”
  • — Seven years ago, Conair began challenging its customer’s deductions by manually researching every deduction. Mayorek explained how Conair and Enterra Solutions partnered together to create a process that keeps track of retailer requirements and automatically checks new orders to identify potential fulfillment challenges. A group of approximately 10 employees was formed to classify deductions into 21 categories, conduct extensive research and deal with unique issues involved in each category. When Conair’s procedures contributed to the problem, they were changed to prevent future deductions. “It is important to remember that every customer has different guidelines, requirements and procedures, and to follow these manually is very difficult,” said Mayorek.
  • –DeAngelis rounded out the Web seminar by highlighting some benefits that Conair realized by using the technology-based compliance solution. The new solution has been able to help Conair reduce deductions, increase recovery of deductions taken and reduce compliance staff costs. Conair was also able to have a better understanding of the challenges, learn how challenges can be addressed (pro-actively, when orders are taken, and after penalties have been assessed), and realize that retailer penalties don’t have to be a continuing “cost of doing business.”

To listen to this Web event in its entirety, click here.

ESCAPE™ works in partnership with your existing management and IT architecture to ensure that your supply chain operations comply with retailer imposed compliance rules, contractual requirements and procedures relating to order processing. We monitor retailers directly to keep these requirements current, accurate and complete, and monitor carriers to track shipping related forms and data. We also provide you with critical information and tools to manage and reduce costs in the end-to-end compliance process, starting before orders are even entered until months after an order is shipped, and we help you maximize the recovery of deductions. ESCAPE is a Solution-as-a-Service offering hosted at a secure datacenter. It can be rapidly deployed and operational, under certain circumstances, in as quickly as 90 days. ESCAPE contains three modules as described below:

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As I have noted in previous posts, retailer compliance penalties are becoming an increasing challenge for manufacturers and distributors. ESCAPE can help reduce compliance penalties and make a company’s supply chain more efficient and effective.