Estimated reading time: 2 minutes, 22 seconds

optimizationAll suppliers, including the ones who communicate in a clear and timely fashion, and who consistently deliver on time, need to be monitored. Compliance optimization, which includes tracking and identifying performance issues and communicating issues to suppliers, pays off for both parties. When supply chain problems are identified at a detailed level, addressed, and fixed, the retailer-supplier partnership benefits. It becomes more efficient and more profitable.

It’s important to keep the profitable payoff in mind because the amount of data generated by the monitoring process is enormous. Documentation, delivery status, and shipments are just the tip of an info iceberg that simply overwhelms the efforts of mere mortals to review (much less fix) using traditional tools like spreadsheets. Multifarious issues that can potentially occur at just about any point in the fulfillment process are best addressed in real time.


But real-time monitoring of “big data” is beyond the means of most retail organizations. Analyzing and reporting on supply chain performance in real time requires specialized data-processing structures that go far beyond those available on the consumer level.


Consider that even the simplest purchase order can easily include a dozen fields, each with its own data elements, and add to the purchase order the many documents sent between parties between the time an order is placed to when it’s delivered (and after, such as invoices). Then think about the thousands of orders fulfilled by scores and scores of suppliers, and it becomes easy to understand why outsourcing the process is almost always a good move for retailers, both in the short and long term.


Companies that monitor and report on compliance issues use large, complex systems. Specialized hardware, which is updated frequently, includes enormous disk drives and processing power that dwarfs what’s available to the desktop number-cruncher. But it’s software that’s really crucial, and this is where specialized vendor monitors provide their most valuable services. To begin, data from multiple documents, coming from multiple sources, must be converted to standardized data structures. Once it’s standardized, the data can be analyzed quickly.


The analysis isn’t simple – it usually includes many different scenarios, each with unique combinations of rules and processes. What the software is doing is searching for anomalies, which are indicators of potential compliance issues. These are reported on quickly, and different actions can be taken, depending on the issues. Often, the system can automatically generate a request that’s sent to the supplier, indicating both the problem and the solution.


The supplier, upon correcting the problem, then reports back to the system. In this way, many compliance issues can be averted with minimal costs and delays for both supplier and retailer.  Because the process has been outsourced (and minimized), both the retailer and supplier can devote their resources to their core businesses.

Last modified on Monday, 13 July 2015
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