It is an incredible feeling to see your product on the shelves of Walmart and Costco surrounded by some of the biggest brands in the market. And to think, it wasn’t too long ago that it was sold exclusively at Mom and Pop stores.
While the business has grown substantially over the years, so has the complexity of the operations. These bigger retailers have a larger set of specific requirements and guidelines that suppliers need to adhere to in order to establish and cultivate a partnership.
One of Deacom’s most recent customers, Tower Laboratories, is experiencing this first-hand. As they continued to grow contracts from big-box retailers, they realized their legacy software was making order fulfillment unnecessarily challenging. Changes to their strategy needed to be made in order to keep up with their success.
For those manufacturers and retailers in similar situations as Tower Laboratories, here are some of the top technical requirements of big-box retailers:
EDI – As contracts get larger, managing the transactions between trading partners becomes more difficult to do manually. In fact, many of the larger retailers will not conduct business with you if you do not have an Electronic Data Interchange (EDI) solution in place. This is an electronic method of sending information from one company to another using a standardized message formatting. It allows the supplier to lower operational costs, improve supply chain visibility, and drive efficiency while the retailer ensures data accuracy.
Validation –21 CFR Part 11 are guidelines set forth by the FDA to require the use of electronic records and signatures for these regulated industries. As a method to ensure companies implement good business practices, the FDA considers the electronic versions of these to be more authentic, accurate, trustworthy and reliable than paper records and handwritten signatures. Not only does the FDA require documented evidence of this validation, but so are customers of contract and private label manufacturers. A software system should provide the tools to meet the 21 CFR Part 11 requirements and make it easy for manufacturers and distributors to provide proof of its validation.
Lot Tracking – The ease at which products can be traced back to their raw materials, and even to the suppliers of those materials, is extremely valuable to retail giants. In the case of a recall, they want to be able to quickly identify the point of contamination all the way to the customer details that received those affected lots. All aspects of an ERP environment should work seamlessly together to ensure that it is possible to quickly trace items through the supply chain in such an unfortunate circumstance.
Quality Control – Inconsistent product quality is unacceptable when dealing with high-volume contracts from such reputable clients. Create strong processes to prevent a company from shipping products that do not meet the specific requirements of the retailer. Multiple QC checkpoints throughout the order fulfillment process help to ensure the finished good meets the criteria set in preproduction. Workers should be restricted from moving the product along without it passing these QC holds with flying colors. At Deacom, we often blame 3rd Shift Harry for being the culprit of these bypassed procedures and very costly mistakes.
Customer Service – Customer service for big-box retailers goes beyond what they are directly experiencing with suppliers. They want to make sure that their customers are receiving valuable customer service as well. A customer relationship management system (CRM) should be used for every interaction between the company, the retailer, and the consumer. Negative post-sale support is often reflected in the volume of purchase returns so it is important to use a CRM to help navigate and document all types of customer service.
When you are getting ready to play in the retail big leagues, you will want to make sure you have these five capabilities are part of your technical foundation.