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5 Ways to Position Your Supply Chain for SQEP

February 3, 2021

In an effort to enhance the end-to-end quality assurance within its U.S. distribution network, Walmart has rolled out its Supplier Quality Excellence Program (SQEP) initiative to more than 100,000 of its suppliers. SQEP comes with new and refined compliance regulations surrounding packaging, barcode and labeling, appointment scheduling, and advanced ship notifications (ASN). If not approached correctly, these regulations can severely impact your bottom line. Fortunately, there are a few ways to position yourself ahead of the pack.

1. Find value in economies of scale

Sending full truckloads into retail is generally the most efficient and cost-effective method of shipping. However, for smaller suppliers, shipping full truckload with unused space can be too expensive. This makes it difficult to benefit from this shipping option and meet their OTIF and SQEP goals at a cost-effective rate. That’s where a retail consolidation program comes in. This solution occurs when multiple POs going to the same destination are combined to ship together–helping suppliers cut costs and optimize efficiency by shipping into retail with full truckload capabilities. Product is then effectively delivered to the retailer on time thanks to a coordinated shipping calendar, known as a sailing schedule. This strategy not only enhances performance at a cost-effective rate, it’s also beneficial to the retailer as more full truckloads arriving at their dock reduces congestion. 

2. Make sure to build a fluid supply chain

Today’s retail market has placed a huge emphasis on supply chain resiliency. But what does that mean? In short, a fluid supply chain equips companies to adjust to market volatility without compromising cost and customer satisfaction. In today’s climate, having access to the right resources (carriers, warehouses, network analysts, etc.) and tools are imperative to effectively manage an end-to-end supply chain, especially as the industry becomes more complex. Fortunately, seasoned 3PLs can offer a retail consolidation program to help any size supplier inherit a fluid supply chain.  As a result, retail rollouts like SQEP become more seamless.

3. Understand retail compliance

Compliance requirements vary depending on which retailer you’re doing business with. The nuances that go into labeling, pack slips, advanced shipping notices, and delivery windows are all defined by the retailer–making it imperative for suppliers to fully understand all the dynamics that go into adhering to these requirements. It may be worth considering to outsource your retail logistics with companies that can deploy retail compliance teams to help ease the burden of these challenges.  Not only will mastering these compliance standards omit your company from costly chargebacks, but retailers also favor suppliers they know they can count on.

4. Demand end-to-end visibility

In order to operate as efficiently as possible, you need full visibility into your entire supply chain. This can be done with a comprehensive Warehouse Transportation System (WMS) and Transportation Management System (TMS). These technologies will keep a pulse of your inventory and help forecast demand to make sure you have the right amount to fulfill retail orders quickly. These tools also give your team access to all necessary paperwork to ensure your freight is retail compliant. The effective data sharing between these two platforms enables your business to drive smarter business decisions with access to detailed information you need to govern your product from manufacturing all the way to retail.

5. Focus on the right KPIs

It’s important to understand how your brand fits in relation to the specific retailer. Focus on metrics that benefit the account as a whole such as capacity utilization, velocity, movement, and on-time performance. In other words, demonstrate that you understand a category by adding value to the retailer, so you also help their business thrive. For example, Walmart’s SQEP was designed to ensure optimal accuracy for packaging, load quality, and purchase order (PO) information. This helps speed up product shipments to store in a timely manner. Focusing on the metrics that give your business an advantage over your competitors may lead to account expansion with a big box retailer like Walmart. But knowing where to focus is the key.

As many companies battle to get a leg up on the competition, some welcome all challenges on their own. Unfortunately, this can lead to a reactive supply chain instead of a proactive one. For businesses looking to get ahead of the pack, enhance their current logistics operations, refine specific processes and perform like a reputable supplier into retail, working with an established 3PL provider is highly recommended. A seasoned 3PL can deliver significant advantages to your supply chain with access to an extensive provider network, the right technology, established retail consolidation programs, and a dedicated team of retail experts to safeguard your business from new retailer rollouts and accruing costs.  

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