White Paper

Effective Vendor Compliance Management

Source: Compliance Networks

To publish a document outlining the best practices in vendor compliance management, you must first start with the company that invented it or if not invented it, certainly perfected it. This company is, of course, Wal-Mart. Their science of supply chain management has forced vendors to increase the predictability of their supply or face chargebacks that border on being punitive and excessive. Their philosophy on vendor relations and vendor accuracy has allowed the company to achieve impressive growth and profits.

This phenomenon did not go unnoticed by supply chain consultants. For years, we have been recommending clients adopt an aggressive supply chain/vendor compliance program. Our reasoning to the client was if your vendor is serving Wal-Mart, your vendor is capable of serving you to similar standards. We had limited success in this area mostly due to the isolated silos of information and the manual nature of collecting, reviewing, researching and withholding payment. At best, clients added 2 or 3 people to their logistics staff and they focused on vendor routing/guidelines, compliance and chargebacks.

These small groups along with some slight system enhancements typically generated a return of 2 to 4 times the investment.

Submitted by Compliance Networks