It is critical to maintain trust between buyers and suppliers. Confrontational relationships can result when the buyer holds the upper hand. A typical way to build trust is to ensure suppliers embrace lean manufacturing techniques and electronic communications via EDI (electronic data interchange) within industry standards and protocols. EDI helps the supply chain become more responsive and allows an opportunity to retrieve data in evaluating supplier performance.
Evaluating the supply chain is common among retailers in order to keep a score card of their vendors. Vendor score carding could include evaluating performance in EDI efficiency, KPIs, point of sale analytics, packaging, environmental impact, distribution and shipping logistics.
With EDI messaging, the ability to respond quickly and accurately is critical to maintaining a healthy relationship between buyers and suppliers. ASN (Advance Ship Notice) compliance is important to the productivity and flow of goods exchanged. Incorrect ASN data retrieval will influence packaging and shipping errors, including incomplete, late and wrong item shipping. This affects the cost of savings to the consumer which, in return, gets charged back to the supplier.
Tracking these errors helps the retailer ensure their warehouse is receiving the right product at the right time and reduces out of stock situations. With vendor score carding, retailers find ways to improve efficiency, service, and reduce costs through EDI data.