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Are You Accounting for Supplier Performance During the Budgeting Process?

Posted By RCVF Admin, Tuesday, January 29, 2019

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Are You Accounting for Supplier Performance During the Budgeting Process?
by Victor Engesser, RVCF

The annual budgeting process for retailers, or any organization for that matter, is stressful. Every business need can’t always be met with dollars and labor resources, and not everything will get the green light. Some things just have to wait. However, one area that’s absolutely critical to achieving major budgeting objectives such as revenue, margin and inventory turns is supplier performance.

If you know where you stand with regards to supplier performance, you’re probably already tracking it at the category or merchandise level, or by merchandise group. Hopefully, you’re working on ways to better manage and improve supplier performance as well. But is supplier performance incorporated into the budgeting process so that it is "owned" in the same way that sales and margin targets are "owned"?

Suppose at some point during the year, it becomes obvious that supplier performance is holding you back from delivering the results you budgeted in certain merchandise categories. Can you really say you were caught by surprise?

After all, you know supplier performance is critical. Otherwise, you won’t maintain desired inventory in-stock, which means you won’t always make the sale, which means you won’t meet your revenue and margin goals.

Instead of waiting for something bad to happen, you need to make sure you get a voice at the table during the budget process when everyone is very much aware of what they’re signing up for. In addition to making sure you have the staff and the support you need, you need to plan for supplier performance. This will help you get the commitment and resources you need now, and the attention and follow through during the year to keep your suppliers’ on track so they uphold their end of the bargain, which is to meet your performance expectations.

The objective should be to have a well-defined, documented target for supplier performance within each merchandise category in order to support the high-level budgeted goals of your company. Merchandise category metrics with budgeted objectives that are affected by supplier performance include but are not limited to inventory dollar levels, inventory turns, order frequency, safety stock levels, and in-stock levels.

To support these category objectives, you need speed to shelf. To have speed to shelf, you need on-time, in-full performance. You need an accurate, timely ASN. And you don’t need delays caused by errors with labels, packaging or cartons. In a nutshell, you need the supplier to adhere to your compliance requirements to achieve your objectives within each category and deliver on your budget goals. When these supplier performance goals are identified and aligned with the merchant, the supply chain compliance team and the merchant can then collaborate and work with suppliers when and where necessary to drive these results.

Internally, you need to identify the necessary resources and required supplier performance levels to achieve your budgeted objectives. Externally, you need to make sure your suppliers know how important their performance is to achieving your goals. You need to make it clear that you’ve established performance goals for the supplier that, if met, will make it possible to hit your numbers.

Here is a simple, five-step approach to incorporating supplier performance management into the budgeting process.

  1. Campaign. Campaign to get others within your organization to understand the importance of incorporating supplier performance management in the annual budgeting process.

  2.  Partner. Partner with key stakeholders to identify what your expectations should be by major category and by major supplier.

  3. Collaborate. Collaborate with major suppliers. Seek alignment and commitment from them to achieve these goals.

  4. Commit. Commit resources and identify specific responsibilities to collaboratively accomplish these goals.

  5. Follow Through. Follow through by measuring, reporting and managing these goals.

The ultimate goal is to use the annual corporate budgeting process to revisit the supplier’s supply chain performance and recommit, both internally and externally with trading partners, to improve performance and the resulting financial benefits it provides to both companies.

You might say to yourself, “Well, we’re already doing this.” But are you truly seizing this moment in time during the budget process to communicate to merchants the importance of having a clear goal for individual supplier performance? If suppliers meet those expectations, you’ll have much more confidence, and much higher probability, that you’ll produce the results needed to meet your budgets in terms of sales, margins, and inventory turns.

The more you directly integrate supplier performance with your budgets, the more it remains top-of-mind throughout the year. Then you can constantly revisit performance goals, determine to what degree supplier performance is keeping you from meeting objectives, and address specific issues as quickly as possible to get back on track.



Tags:  Budget  Budgeting Supplier Performance  supplier performance management  Suppliers 

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RVCF Spotlight: Conference One-on-One Meetings

Posted By RCVF Admin, Monday, January 28, 2019

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RVCF Spotlight: Conference One-on-One Meetings
by Susan Haupt, RVCF

One-on-One Meetings began as casual, ad-hoc conversations between Retailers and Merchandise Suppliers during RVCF Conferences.  Fast-forward to today where One-on-One meetings have become a signature session on every agenda with literally hundreds of meetings taking place during the course of each RVCF conference.   

The meetings themselves look something like “speed dating”.  Retailers are situated at tables in a separate area of the event venue during designated meeting times. Merchandise suppliers report to the meeting area and move among the tables in 15-20 minute intervals following their pre-assigned meeting schedule.  The area is closely monitored by RVCF Staff to make sure that the meetings run smoothly and on time.   Discussions may include performance reviews, upcoming initiatives, deduction evaluation, and more.

Retailers wishing to conduct One-on-One Meetings with their merchandise suppliers need only advise an RVCF Staff member of their interest and availability to meet.  We will notify you of your meeting requests including the supplier number and topic(s) to be discussed. Only the requests that you approve will be included in your schedule, which is sent the week prior to the conference.

Merchandise Suppliers wishing to participate in One-on-One Meetings with their retailer trading partners must register for the event and pay their conference registration fee.  In the weeks prior to the conference, an on-line survey will be sent through which meetings are requested.  All registrants that requested meetings will receive a schedule of their approved meetings the week prior to the conference.

To make the most of this unique opportunity for collaboration, please be mindful of this timeline. 

  • On-going - Retailers commit to One-on-One Participation.
  • 6 weeks prior to conference – RVCF launches meeting request survey to paid registrants.  Please complete the survey as thoroughly as possible including your availability for meetings.  Be sure to take into account travel plans and sessions that you don't want to miss.  
  • 5 weeks prior to conference – meeting requests are distributed to Retailers for review and approval.
  • 4 weeks prior to conference – scheduling of retailer-approved meetings take place.
  • 1 week prior to conference – schedules are distributed to Retailer and Merchandise Supplier participants.

While the process has evolved over the years, the purpose remains unchanged; to provide an environment for Retailers and Suppliers to meet, exchange valuable feedback concerning their business relationships and pave the way for future dialog.   All participants benefit from being able to meet with multiple trading partners in one location during the course of a single trip saving precious travel dollars. 

Tags:  One-on-One Meetings  Retailers  RVCF Conferences  Suppliers 

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RVCF Is Offering a Holiday Special for New Supplier Members

Posted By RCVF Admin, Thursday, December 6, 2018

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RVCF Is Offering a Holiday Special for New Supplier Members
December RVCF Link: From Desk of Kim Zablocky

We’re heading down the home stretch of what has been a fantastic holiday season in retail. Shoppers feel good about the economy, sales were up on Black Friday and throughout the holiday weekend, and the retail industry is poised for a strong finish. If you’re a CFO or COO for a merchandise supplier organization, you probably have a big smile on your face right about now.

Then your retailer customers remit outstanding invoices and you notice a high number of deductions. Shipments didn’t comply with retailer requirements. Some arrived early or late to the retailer distribution center. Others were unannounced because of ASN issues.

Meanwhile, the finance department is fuming as they try to figure out how tens of thousands of dollars disappeared. Can you really afford to lose 1 to 2 percent of gross sales due to shipping errors?

There’s a solution to this accounts receivable dilution. It’s called retailer-supplier collaboration. And it begins with RVCF membership. Here’s how RVCF brings trading partners and peers together to solve problems and increase profits.

Two National Conferences

RVCF’s Annual Spring and Fall Conferences drive collaboration by providing a platform for learning about important industry issues, best practices and, most importantly, one-on-one meetings with retailer customers. Supplier members have told us that the access we provide to multiple retailers in a single trip and the ability to address specific issues during each meeting are worth the cost alone.

Supplier Open Forum Calls

Each month, merchandise supplier members have the opportunity to help and learn from peers who are dealing with or have already overcome similar issues with retailers.

RVCF Compliance Clearinghouse

When you miss changes to retailer requirements, orders continue to ship incorrectly, chargebacks mount, revenues are lost, and the trading partner relationship suffers. The RVCF team monitors the compliance guides of more than 100 retailers so you don’t have to devote resources to this tedious process. We then alert your order-to-cash team of changes within 24 hours so you can proactively address the issue and contact your retailer customer if necessary to implement an suitable solution.

Help Desk Support

Struggling with a problem that your in-house team can’t seem to solve? RVCF members can always reach out to the RVCF team’s industry veterans for help.

Workshops and Webinars

In addition to our annual Spring and Fall Conferences, RVCF offers workshops and webinars to educate your team about best practices, the latest research and trends, and how to adapt to a quickly changing retail landscape.

All About Retail Compliance

All supplier members receive a free issue of RVCF’s All About Retail Compliance, a comprehensive reference for anyone who works in compliance in the retail supply chain. This handbook includes terminology, definitions and best practices that reflect the latest industry trends and technology. In addition to serving as a value source of information, All About Retail Compliance can be used as a training tool.

Research Participation

RVCF periodically conducts surveys and studies that shed light on important issues, such as compliance management, drop ship, fill rate, investigating and reconciling deduction claims, value-added services and more. By sharing your experiences, insights, concerns and frustrations, you can push for changes that benefit your organization and the entire supplier community.

Our Holiday Special for New Supplier Members

If you’ve never been a member of RVCF or haven’t been a member since 2014, you can take advantage of 20 percent savings on regular membership pricing. Your company must join on or before January 15, 2019, which happens to be our 19th year in existence.

I’m happy to say, and I’m sure RVCF members will concur, that we have saved suppliers millions of dollars over the years by creating opportunities for collaboration with retailer customers, peers and service providers.

RVCF membership provides your order-to-cash team with the tools they need to speed goods to market and get products in the hands of consumers in an error-free, cost-effective manner. By joining RVCF, you’ll demonstrate to retailers that you’re committed to order fulfillment excellence and improving the trading partner relationship.

Again, 20 percent off RVCF membership for new supplier members is only available through January 15, 2019. For more information, contact Susan Haupt, RVCF Vice President of Operations and Member Services, at 646-442-3433 or



Tags:  RVCF Membership  Suppliers 

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In 2019, Retailers and Suppliers Will Need Each Other More than Ever

Posted By RCVF Admin, Monday, October 29, 2018

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In 2019, Retailers and Suppliers Will Need Each Other More than Ever

It’s no secret that many retailers and suppliers are facing serious challenges as they adapt to a quickly changing retail landscape. You have significant consolidation among both retailers and suppliers. Many companies have replaced seasoned professionals who knew how to achieve progress through collaboration with inexperienced folks who are forced to learn on the job, all in the name of cost-cutting and reducing headcounts.

Many retailers that were at one time among the most successful and respected in the industry no longer exist. They failed to adapt to new competition, new order fulfillment models, and new customer demands. Consolidation has made organizations on both sides larger, but the bigger they are, the harder they fall.

That said, retail is ripe with opportunity. Those who are willing to do the work to evolve and grow aren’t talking about survival. They’re talking about taking their success to new heights.

As we prepare for 2019, retailers and suppliers need each other more than ever. And RVCF membership creates more opportunities for collaboration than any organization in the industry.

This was evident at the 2018 RVCF Fall Conference. With more than 35 retailers in attendance, 30 educational sessions, more than 530 one-on-one meetings between retailers and suppliers, and peer-to-peer discussions about supplier relationship management and customer relationship management, collaboration was constant – and productive.

We plan to carry that momentum into 2019 and provide our members with the information, resources and collaborative opportunities they need throughout the year.

We’ll cultivate the concept of unified commerce in which there are no separate shopping channels with separate inventories and customer bases. Rather than brick-and-mortar commerce, e-commerce, mobile commerce, social commerce, etc., there is simply commerce. Unified commerce.

We’ll focus on the importance of data and how to use it. We’ll continue to look for ways to enhance drop ship strategies and develop best practices. We’ll advocate for the Perfect Order – on-time, in-full, damage-free, with accurate documentation.

Everything we do is designed to accelerate the error-free flow of goods through the supply chain, while controlling costs, and improving margins for both retailers and suppliers. RVCF members benefit from our initiatives, events and educational content, as well as our technology solutions and consulting services, throughout the year.

But you can’t sit on the sidelines. You have to get involved. You have to show up. You have to participate. You have to work with your peers and trading partners to find solutions and create competitive advantages instead of waiting for them to fall onto your lap.

2019 will undoubtedly be a rough year for some retailers and suppliers. For others, it has the potential to be the best year ever. What kind of year will it be for you?

I ask that question because I believe the answer is a choice, not a predetermined outcome. I hope you’ll choose success and become a member of RVCF to put your organization in a better position to succeed.

Please visit the RVCF website to learn more about membership, and feel free to contact any member of the RVCF team with questions or ideas about what we can do to better serve the retail community. Remember, RVCF exists to bring retailers and suppliers together to solve problems and grow profits. We hope you’ll join us.


Tags:  Collaboration  Membership  retailers  RVCF  Suppliers 

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