In the first part of our guide to avoiding Must Arrive BY Date (MABD) fines and chargebacks, we discussed how you can get off on the right foot with your retail buyer by determining what their system of support is and what they will expect from you when it comes to delivery time.
In this section, we will look at ways you can improve the coordination of your company's warehousing and production processes. These two areas of your supply chain usually have the biggest impact on your speed-to-market, which sequentially leads to increased MABD compliance infractions and missed deliveries. For many companies, warehouse operations and even production are outsourced. When that is the case, these two areas can be the most difficult to manage and coordinate—especially when communication gaps exist.
Let's take a look at a few tips that you should keep in mind and subsequently carry out to improve your ability to ensure that shipments arrive at your retailer's distribution center or store location on time.
Manage Lead Times Efficiently And Be Prepared
The lead time is the amount of time it takes to get from the beginning to the completion of your company's production or manufacturing process. In retail supply chain terms, lead time begins when your retailer places an order and ends when your product is ready for delivery.
If you ship to a large retailer that enforces MABD compliance or other delivery guidelines, which may result in chargebacks or fines upon failure to comply, ask yourself if your business has to deal with the following potential obstacles:
Routine shipments to a retailer or a set schedule of deliveries (Quarterly, Monthly, Weekly, etc.) that could be disrupted by emergencies (flood, fire), holidays, or sudden staff and equipment shortages
Reliance on a warehousing company or manufacturer that provides an imperative service to your supply chain
If you said yes to either or both of the previous points, there's a good chance that a disruption at your business or at one of your service provider's businesses could throw your retail supply chain into disaray. It's important to work closely with your team and your service providers to determine the amount of time it would take to bounce back from a disruption.
Know your current lead time and ensure that it constantly meets your retailer's required MABD windows and delivery dates
Estimate how different disruptions affect your lead time, including ice storms and holidays that your employees have off
Have a back-up plan for every scenario under the sun and make sure your vendors do too
On the occasion that a delivery date cannot be met, work with your retail buyer to see if they will extend the date or ask your carrier to expedite the shipment.
Communication Is Always The Key To Success
Communication is what makes the world go around. Unfortunately, it is often overlooked and underutilized in many aspects of life, including the way we do business.
If your businesses frequently misses the target on MABD compliance and other retail delivery guidelines, there's a good chance that miscommunication or a lack thereof is the main culprit. If you feel that one of your suppliers is the reason that you are unable to make on-time shipments, be sure to inform them of the situation and how it is affecting your business. In the end, it's not just your company that will suffer. It's everyone that has a fingerprint somewhere within your retail supply chain. Your lost business equals lost business for others.
In the third and final installment of this guide to avoiding MABD fines and other retail delivery penalties, we will discuss how to best identify a retail ready carrier.