From meeting customer expectations to ensuring that they are abiding by all applicable laws and regulations, companies of all types and sizes jump through a lot of hoops to meet their goals. For many, working with vendors is one of the biggest challenges. Business owners rely on numerous vendors to provide the raw materials, supplies, etc. that they need to successfully run their companies.
Effectively managing your vendors is vital, and vendor compliance is a major component of that. Establishing requirements for the vendors you work with helps create order and makes it easier to resolve any problems that may arise. Your business likely works with numerous vendors and requires many types of supplies to operate efficiently. While vendor compliance is always important, it is especially important for incoming shipping materials. Why is vendor compliance important for shipping materials? Here are just a few reasons.
What Is a Vendor Compliance Policy?
Before we explain why vendor compliance matters, it is important to understand what exactly a vendor compliance policy is. In short, it is a document that establishes your business’s expectations, requirements and penalties regarding service standards, backorders, product condition, delivery dates, product quality and other important factors. The exact terms of a vendor compliance document may vary greatly from one company to another. In general, though, the document should spell out your company’s expectations and requirements and what penalties a vendor will face if those expectations and requirements are not met.
An effective compliance policy includes a chargeback schedule that penalizes vendors who do not follow the established procedures. These penalties should be based either on a flat cost per infraction or the hourly cost of manpower you will incur as the result of a vendor failing to uphold their end of the bargain. Your compliance policy should not be treated as a means for your company to bring in money. Instead, it should encourage vendors to comply rather than face fees.
Why Vendor Compliance Matters for Shipping Materials
Whether your business ships out a few packages daily or thousands, having the shipping materials you need on hand is vital. You need to know that your supplier will deliver them to you when they promise. And you need to be confident that the materials they deliver will meet your requirements for quality and that your order will be accurate. A well-written vendor compliance policy helps ensure that you will have the shipping materials you need when you need them. That’s not the only reason why vendor compliance is important for incoming shipping materials, though.
Establishes Consistent Goals
In today’s business world, consistency is important. Business owners need to have plans in place to ensure stability in all of their operations. These plans help maximize efficiency by making sure that necessary supplies are delivered when they are needed. A well-planned program helps standardize internal procedures and avoid unexpected–and potentially costly–delays.
Compliance with Shipping Regulations
If your company is shipping hazardous materials or other items with specific shipping regulations, your vendor compliance policy must stipulate that the shipping materials the company delivers meet all applicable regulations. Using the wrong shipping materials could cost your company thousands of dollars in penalties, so you need to be assured that your vendor will be held responsible if they fail to deliver the correct products.
When your shipping material vendor fails to deliver as promised, it can cost your company a substantial amount of money. Without supplies, you may find yourself unable to fulfill customer orders. This can damage your reputation and make customers feel like they cannot depend on you for timely order fulfillment. You may also have to waste valuable time searching for the supplies you need on short notice. If you are able to find the supplies you need, you may have to spend more to obtain them.
Smoother Retail Supply Chain
Improving vendor compliance helps reduce variability in the supply chain. It establishes more stable sending and receiving protocols and is mutually beneficial for both vendors and the businesses that rely on them. For retailers, vendor compliance ensures they will have what they need when they need it or the vendor will be responsible for paying a penalty. For vendors, detailed compliance policies help eliminate last-minute orders or changes. This can eliminate days from the supply chain and help everyone get what they need faster.
Vendor compliance is an important part of any business that relies on supplies from other companies. Shipping supplies are vital for many companies and having a compliance policy in place helps ensure that vendors will deliver as required.