Affordable Distribution Management: Evaluating Vendor Shipping Performance

By Don Benson, P.E.

Probably the most difficult aspect of Receiving is dealing with the range of quality of the orders received. Dating, damage, overs and shorts are just the beginning of the opportunities for special handling. The Malcolm Baldridge Award and the ISO have developed out if this issue, and many organizations have invested a great deal of time and energy to establish a base of consistent shipping performance and are constantly implementing changes to improve methods and processes.

The other side of this issue does not receive much attention: how the receiving organization can take initiative to monitor vendor performance and make the results visible. Generally the process in most receiving departments is to cope with the receiving impact of poorly performing vendors and occasionally, when performance becomes unbearable, we react and perhaps over react, by changing vendors, if we can. However, there is a better way to deal with this situation that can benefit your Receiving Department, your Company, and the Vendor.

I suggest that you begin a process of recording the problems you encounter each day, by vendor. And then every month create and publish a summary report of vendor performance, naming and ranking the poorly performing vendors (with frequency of occurrence of problem by type) and the perfect vendors, and that you send the report to your Buying/Purchasing Department and post it on your Bulletin Board.

In my experience, with any measurement project, making the information visible will stimulate change. The fun part of this will be to notice the changes that occur all around you out of this simple initiative, in your company and your vendors.

In the next newsletter, I'll talk about what you might do to enhance performance within the receiving department.

Don Benson, P.E., has been consulting to retail, wholesale and manufacturing organizations for over 25 years. His practice focuses on improving the effectiveness of warehouse and distribution operations. His office is in Oakland, California. He can be reached at [email protected] or (510) 482-3436.

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Other articles in this series:

Improving Distribution Operations

Evaluating Vendor Shipping Performance

Improving Labor Productivity

Picking Document Design

Implement Cycle Counting

Inventory Storage

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