Tag Archives: Big-box Retailers

5 Questions on How Startups Should Begin Improving Their Supply Chains

Improving Your Supply Chain
Hundreds of businesses are facing the exact same problems as you right now. Many are figuring out how to take their supply chain to the next level. What are some ways other companies have tackled what you’re up against?

In this latest podcast, I address five questions that have come up repeatedly in my conversations with small businesses:

  1. What are some ways to reduce costs and improve performance without sacrificing quality?
  2. How can a small business use technology to improve its efficiency?
  3. How can small business owners get employees and others to buy into managing their supply chain better?
  4. How can a small business oversee and boost the performance of their supply chain partners?
  5. What are some of my best suggestions for making the management of a supply chain more efficient?

Download or listen to the podcast from the link above, or check out the full podcast transcript. Also, be sure to subscribe to the podcast through iTunes or your other podcast app.

[Image Source, modified]

6 Proven Ways to Stop Burning Money on Customer Fines

If you’re shipping to a large customer, especially a big-box retailer, then you’ve likely encountered chargebacks or fines. Many large companies fine their vendors when they encounter a deviation from purchase order or vendor requirements. Viewing these vendor fines as an easy way to boost their bottom line, large companies have recently increased their emphasis on chargebacks. Some companies have even created “Profit Recovery” departments with the directive of finding methods to reduce payables to vendors. While some of these fines are necessary motivators for supply chain compliance, many of these deviations are the result of problems on the receiver’s end of operations.

Chargebacks and Fines Burning Money

For those who don’t enjoy paying their customers, here’s five tools to fight chargebacks and reduce the number of fines you receive. Of course, no one strategy can solve all of your problems, but my company was able to reduce chargeback expenses by over 60% with these methods.

1 – Fight Every Single Chargeback

As much as you dislike filing disputes, a clerk somewhere dislikes processing them just as much. Many companies (such as Walmart) will reduce unofficially the number of fines if they know you will dispute them. Paperwork piles up on their end and suddenly charging you for every small discrepancy doesn’t cover the cost of hiring an additional clerk to handle your disputes. Even if you know you’ll lose the dispute, file it anyway.

2 – Perfect Paperwork

Perfect Shipping Documentation

From the disputes I’ve dealt with, approximately half of them are a result of a problem on the receiving (customer) side. However, we can still ended up paying for many of the shortages or other problems if our shipping documentation is not detailed enough. To avoid this problem, over-document when you ship. Absolutely be sure to include carton count, weight, pallet count, and other basic information. If possible, seal the trailer and record the seal number. Having the driver count and sign the bill of lading is also essential.

When shipping by FedEx, we often strapped boxes together to save on freight costs. However, when a customer claims a shortage, this prevents us from proving our carton count because of the banded boxes. We therefore changed our process to not strapping together boxes. This change gives us an exact FedEx paper trail for each carton to help us win future disputes.

Almost as important as perfect shipping documentation is a filing system that will help you find the necessary paperwork when you need it months later. Clearly marked, well-organized folders or paperless filing systems are well worth the time they take. They’ll simplify your life by making the dispute-filing process quick and easy. For chronic-problem customers, we maintain spreadsheets to track pertinent information that we can quickly access later. This few minutes of data entry saves hours of searching when disputes arise.

Perfect Dispute Paperwork

Another place where it helps to be exact is in the dispute paperwork you’ll send to contest the fine. Ensure every field is complete and legible if handwritten (typed is better). Be descriptive and make it very easy to understand. Remember, a clerk who reviews disputes all day will handle your claims. Anything you can do with your dispute to make the clerk’s job easier will result in more fines being rescinded.

3 – Never Pay the Same Fine Twice

When acquiring a new customer, always read their routing instruction guide so you can build a process that follows their requirements. However, if you miss something and are fined for it, improve your processes so you never pay the same fine twice.

For each chargeback we receive, we assemble everyone who interacts with the customer into a quick huddle and agree on changes to avoid future chargebacks. If necessary, we institute a two-person sign off system or other techniques outlined in my previous article, Strategies to Fulfill Customer-specific Requirements. For our very difficult customers, we record every piece of data and take pictures of every piece we ship out. Then when the inevitable chargebacks come, we can easily dispute them by replying with our detailed paperwork and pictures.

For example, one of our more complex customers required slip sheets (40×48 inch pieces of flat cardboard) between different SKUs on a pallet. Since most of our other customers will accept mixed pallets, we missed this requirement. However, after receiving a significant fine, we reviewed and changed our process. The pick sheets that print for that customer now have the instructions clearly outlined. We also take pictures of the pallets and require two authorized signatures before anything for that customer leaves our warehouse.

4 – Collaborate with the DC

Many complicated issues can be quickly solved by going to the gemba, or source, of the problem. Usually, that means visiting your customer’s distribution center and talking with their team. Seeing how they handle your products can spur creative collaboration that saves both companies time, money, and headaches.

We had constant product damage issues with one of our major customers. We were following their routing requirements exactly, but their requirements were often the cause of damages for our unique products. We brought the issue up in a visit and several follow-up conversations with the receiving lead at the primary DC we shipped to. After explaining the problem and brainstorming together, we were able to tweak the routing rules to a solution that both reduced damages and made receipts easier for the their team.

5 – Share Feedback with Buyer

If despite your best efforts, you’re still swimming in fines from a specific customer, it may be time to elevate the issue to the buyer. While this depends heavily on your relationship, we were recently pleasantly surprised with how helpful a buyer from a national US retailer was in helping us to solve dispute problems. We were contacted by someone from the “Profit Recovery” department claiming we owed money for product damages from several years prior. Unsure how to respond, we raised the issue with the buyer on our next sales meeting later that month. She was happy to help, and detailed exactly who we should contact and what we should say to have the disputes dropped. This method is especially useful if the charges seem obviously unjustified.

6 – Budget, Minimize, and Improve

Problems and variations are still a reality for most supply chains, especially growing small businesses. While doing our best to standardize and automate, variations still exist, and some will result in fines. A wise course of action at the executive level would be to set a target maximum for customer chargebacks and support improvements that reduce that budgeted allowance. Supply chains are full of different companies and people working together to create value for the end customer. Anything you can do to collaborate and make the jobs of partner companies easier will often reduce fines and chargebacks – and make your offering to the end customer more valuable and competitive.

Want to join in our quest to conquer the wild west of supply chain management? Subscribe to Supply Chain Cowboy and receive future articles by email.

Better Supply Chain Decisions through Data Analysis

“Should we cancel the purchase order? We need to know today – and we can’t be wrong on this.” Only two-thirds of stores had reported any sales data from a newly launched product, and my team needed to know whether or not to invest tens of thousands of dollars in additional replenishment inventory. We already had a very large number on order, and based on pre-sales forecasts, we needed nearly double what we had coming. But with just a few data points, was it possible to tell whether we needed the stock or not? It all came down to the data: Could it be trusted? Were my assumptions correct? Was there enough to act on?

Soon after finishing business school and starting my career, I was quickly surprised by the contrast between the discussions that took place in the classroom and in conference rooms at the office. In academic case studies, my classes would look over graphs and charts to find important business lessons that the professor was helping us discover. In the real-world however, emotions, hopes, politics, and persuasion often make decisions much less clear than a business school case study. The small business I work with often relies on its supply chain team to make many decisions that require extensive data analysis. With moderate experience with excel and databases, my team has been able to slowly help our company make better decisions by taking out the myth of emotion and replacing it with the confidence of data.

Data-driven Analysis

Forecasting, inventory, purchasing, logistics, and process improvement are often done by gut-feeling in very small companies. When you don’t have the systems or people to gather and process the information, making your best guess is often all you can do. When operations are small, this works most of the time because you are able to get a feel for most parts of the business since you’re involved with most parts. But as the company grows, staying connected with each part of the supply chain becomes increasingly difficult. If you haven’t already, this is when you must switch from trusting your feeling to trusting your numbers.

There’s an excellent quote that I like:

“In God we trust. All others bring data.”

-W. Edwards Diming [Source]

It highlights that no matter how much we trust our intuition about a decision, numbers are often what really matter.

Which Data to Use?

One of the biggest problems with data in modern systems is the sheer size of the information you collect. If academic case studies were 200 pages instead of 20, schools might focus more on training students how to sift through the noise to find the important data. However, until then, experience and past trends are the best guides for making decisions.

With so many numbers in your system’s database, each department or side of a decision can often build a data-backed case for why their solution is the best. It then becomes important for the head decision maker to be able to judge which information is most relevant and accurate. He or she should start by asking the following questions:

  • Where does this information come from?
  • How was the data collected?
  • What are the assumptions being made?
  • Why do the two (or three or more) data points show different trends?
  • How could these conflicting results actually be pointing to the same conclusion?
  • What numbers can we all agree on?

By agreeing on the same assumptions and the pertinent data sets, you can better reach agreement on how to move forward with the information you have.

When the Numbers Lie

Sometimes, the numbers tell a different story from reality. Even if all analysis points to buying more of product,  only you can tell that the product will soon be discontinued, and that you don’t need more stock. Often data analysis isn’t so much about manipulating the pivot table, but adding the pertinent information that the system doesn’t cover. Adding everything you know that the system doesn’t, and then looking at the data all together often helps you make the wisest decision.

Highest and Lowest Case Scenario

“It’s only about two weeks of data, but it’s enough to make some decisions,” I said.

“I’m just not sure if we can trust it yet. There’s so much we don’t know,” a sales analyst replied. There were still many questions that we couldn’t answer. How many stores had yet to receive the product? Could the product still be in the back room? What if employees had bought the product instead of customers? I needed some way to make the 10 days of sales data point to something – and I needed enough confidence in the numbers that everyone could trust them.

I looked at the data again, and I wrote out what assumptions I could make. To reach my averages, I assumed every possible reason sales could be artificially low was actually taking place. Based on these high assumptions, I determined that average sales per store would likely be less than 3 per week. There were enough stores that had initial sales data that I could confidently say sales would very likely be between a high of 3 and a low of 1 per week. This was significantly lower than the 10 per week forecast for which we were about to place a purchase order.

“The data is convincing – and even if the high boundary number doubled to six per week, we’d still have enough without this order,” the brand manager replied. “Ten per week just isn’t a realistic expectation. Let’s cancel the order.”

By giving a confident range of average sales, I was able to help my team make the right decision and avoid large overstocks of inventory – something we have continually struggled with throughout the company’s history. Sometimes there isn’t quite enough data to make a definitive argument. In cases where you have even some data, using high and low assumptions can often give you enough confidence to move toward the right decision.

We’re not robots – and we shouldn’t focus solely on numbers. However, by incorporating more data into our decisions, we can often find better and more predictable results. The key is to know what data is useful, opposed to noise, and how to use that data correctly. Looking at the same, accurate data, and deciding on high and low assumptions are strategies that have helped move our company in the right direction.

How to Ship to Walmart, Target, Walgreens, and Other Big-box Retailers – Part 3 of 3

Shipping to Big Box Retailers

Part Three – Shipping the Order

Congratulations, you’ve received your first order from a new big-box retailer. In part one and two of this series, I described how to bring an order into your system, pick it, and label the product properly. With all of that completed correctly, we move onto the final steps of shipping an order to the big-box retailer.

Specifically, this article will touch on whether to ship via small package or on a pallet, common customer shipping requirements, advance ship notices (ASNs), and paperwork you’ll want to keep for future reference. As with the previous two parts, this article is no substitution for your customer’s routing guide, which is the ultimate authority to any questions you have. Nevertheless, the topics below will help guide you and your team through the process and avoid many costly mistakes.

To Palletize or Not to Palletize?

One of the first major decisions you need to make when shipping your order is whether to ship via a small package carrier (FedEx or UPS), or on a pallet. If the order is large, then palletizing it is the obvious choice. However, when the order is small, that decision becomes less clear.

If the customer is paying for freight, then they likely have firm guidelines about when orders should go small package or palletized. Consult the customer’s routing guide; the rules vary widely for each customer. For example, if the order is over fifteen cases, or weighs more than 150 lbs. total, then several retailers require the order to be shipped on a pallet. However, others put the threshold at 20 or 25 cases, and as much as 300 lbs.

If you are paying freight, then the customer’s case count or weight limit often does not apply, and you can ship whichever method is cheapest or most reliable. However, several big-box stores will refuse shipments over a certain weight, even if you are paying the freight bill.

Small Package Shipping Considerations

When using small package carriers to ship, usually FedEx or UPS, you’ll want to consider several important points. First is the actual shipping label. Because small package shipments do not require a formal bill of lading, many retailers require the shipping label and packing list to include specific information. For example, the customer’s PO#, department, or order type may need to be printed into the specified fields on the label. Even if not required, entering them can help avoid mistakes at the customer’s distribution center (DC), so I recommend it whenever possible.

Another consideration is whether to band the boxes together or not. Often, banding small boxes together can save money with small carriers because they round up the package weight. Thus, two packages that weigh 4.1 lbs. each would cost the same as two 5 lbs. packages. Bound together though, the bill would charge for one 9 lb. box. While this method can sometimes save money, there are many retailers that will fine vendors that send them boxes bound together. Check with your customer, and run price calculations, to see if this method will indeed save you money, and if your customer will accept banded boxes.

Pallet Shipping Considerations

“A” Good Base

If your order is big enough, then you then have to consider the requirements for shipping on a pallet. To begin with, you’ll need a high-quality pallet to stack the product on. Most large retailers require #1 or Grade A pallets. Essentially, these are pallets in very good condition that have not experienced any damage and have all their original parts in strong, sturdy condition. Any pallets that have visible damage or missing parts are not Grade A and should not be sent to customers that require them. Some retailers accept two-way pallets (pallets that can only be picked up on the short ends, as pictured), but many require four-way pallets.

Stacking the Product – Pallet Height Limits

Once you’ve found a good pallet that will meet the customer’s requirements, stack the product on the pallet to evenly distribute the weight and support the product. Most retailers do not allow any overhang, so be careful to stack everything within the 40 x 48 inch space. As the product stacks up, you’ll want to consider pallet height requirements. Most large retailers limit how high pallets can be in order to maximize their DC’s racking space. Some retailers will publish this limit in their vendor guide, but often you must call the DC and ask what their limit is. This varies widely by retailer. The lowest I’ve seen is 55 inches (60 inches including the 5-inch pallet). Some allow as high as 96 inches. The most difficult customers are the few who have different requirements for each DC. CVS is an example of this. My team calls each DC to get a pallet-height limit, which sometimes changes. We could ship shorter pallets to all the DCs, which is what we often do, but sometimes stacking the pallet a bit higher can save us a significant amount in freight costs.

Once the pallet is built, be sure to securely shrink wrap it to protect the product while in transit. If the product is light, secure the product very well to the pallet with several layers of shrink wrap. This will prevent it from coming off the pallet when it is moved.

Some retailers require black shrink wrap, especially if the product is a high-value item. Black shrink wrap hides the product from those moving it, which can reduce theft or other problems.

Advance Ship Notices (ASNs)

As discussed in part 1, most large retailers communicate with vendors via EDI (Electronic Data Interchange). An increasing number of big-box stores are requiring  vendors to send advance ship notices (ASNs) when they ship orders. An ASN is an EDI document (EDI document number 856) that tells the customer how each order was shipped. More than just a tracking number, ASNs detail the carrier, tracking information, and ship date, as well as a detailed breakdown of how the order was packaged. Vendors usually require special ASN labels that show a serial shipping container code (SSCC-18) that is 18 digits long. These codes are unique to each package or pallet sent to a customer, and the customer’s receiving department can know exactly what is contained in the pallet or package by scanning the 18-digit barcode. One of the key benefits of ASNs is that they easily communicate such detailed information that they reduce the work load on the receiving end, as well as decrease opportunities for error. The label shown here is an example of an ASN label with the 18-digit barcode at the bottom. If your customer requires an ASN label, it will have very detailed requirements, which should further explain what you would need to put on the label. Additionally, many retailers recognize the limits on small suppliers, and many offer a free, web-based ASN system that allows you to print labels from the vendor’s website.

Scheduling the Shipment and Delivery

Preferred Carriers

If you’ve submitted routing for the order (as discussed in part 1), then you will likely receive instruction on which carrier to use. However, if you must choose your own carrier, you may want to check if the customer has any preferred carriers. Many have a handful of favorite carriers, which reduces congestion at their receiving docks and helps avoid errors from unfamiliar shipping companies. Some retailers will not accept shipments from carriers not on their approved list. Others will grant special leniencies if you use their preferred carriers. For example, if a shipment leaves your warehouse on time with a customer’s preferred carrier but still arrives late at the destination DC, some vendors will not issue a fine. Be sure to note which freight carriers to use and to implement a process that ensures only those carriers are used. Even if preferred carriers are slightly more expensive, they are often cheaper overall when considering the potential fines or issues with a problem shipment.

Delivery Appointments

Another requirement for many retailers is a delivery appointment. Usually, the trucking company handles the delivery appointment, often coordinating the delivery a day or two in advance or arrival. However, some retailers require you to call and schedule the delivery before you even ship the product. In this case, be sure to communicate clearly with the trucking company about the scheduled appointment.

Signed, Sealed, Delivered

Packing Lists and Bills of Lading

With the order correctly labeled and packaged, you’re ready to hand over the product to the freight company. Your job is almost done if you’re using a small package carrier, but you still have a few more important steps ahead if you are shipping a palletized load, most involving paperwork. The packing list should go in a marked pouch on the lead carton so that the receiver can quickly find it. In addition, many retailers will require you to put specific information on the packing list and bill of lading. Be sure to follow all these requirements to avoid chargebacks and fines.

A Foolproof Paper Trail

A common problem when shipping to large retailers is loss or damage of product when they receive it. Sometimes the product really is lost in transit, but other times the receiver may miscount your product when receiving it. When this happens, the customer will usually take a deduction from your invoice or fine you through a chargeback for the product that they did not receive. You can still obtain the money from these deductions or chargebacks if you have the proper paperwork, signatures, and information. Specifically, place a seal on the trailer and record the seal number, and instruct the driver to count your product and sign accordingly on each bill of lading. If you are having frequent problems, take detailed pictures of your loads when they leave for additional proof that you shipped the order complete. Recording all this information will help you easily dispute chargebacks or file freight claims with carriers. If you have all your paperwork in order, then in most situations you will likely receive compensation from either the customer or carrier.

Tracking the Order

The final step in the process is tracking your order and ensuring delivery. Tracking orders helps to find delays, which can often be resolved quickly by calling the carrier. Most retailers are much happier when you call and inform them that the carrier will be a day late, but that you have resolved the issue, than if they have to call you two weeks after the product should have arrived asking where it is. Once the product has delivered, print and file a copy of the proof of delivery (POD). Sometimes large retailers will fine you for shipments that arrived many months ago. To prove that you fulfilled the order, you will often need a POD. However, many carriers delete and purge their records after 9 to 12 months, so without a printed copy, you may never be able to prove delivery. Although most PODs will just sit in a  file, the few that you do need will often justify the cost of tracking each shipment to your larger customers.

Final Thoughts

Shipping to big-box retailers can require a lot of effort and staff. This three-part series has given an overview of how to receive an order into your system, prepare and label the order, and ship it to the destination. Always keep in mind that the goal is to move your product efficiently through your customers’ supply chains and into consumers’ homes. Most of the customer requirements have this same goal in mind – even if they sometimes feel like hoops to jump through. You should consider adding to your standard fulfillment process anything that reduces opportunities for error, improves efficiency and accuracy, or helps your customer’s team correctly receive and process your product. By collaborating, sometimes even visiting, with your customer’s receiving team, you may come up with additional ideas on how to better move your product through the supply chain.

What experiences do you have with shipping to big-box retailers? What additional questions do you have? Although my team has shipped to several dozen large customers, we also are always looking for advice and opportunities to improve.

Please leave your success stories or questions below in a comment, and click here to receive future Supply Chain Cowboy articles by email.

How to Ship to Walmart, Target, Walgreens, and Other Big-box Retailers – Part 2 of 3

Shipping to Big Box Retailers

Part Two – Preparing the Order

You’ve received your first order from a new big-box retailer. In part oneof this series, we described many of the steps necessary to bring an order into your system correctly as well as guidelines for requesting routing. Now we’ll head out to the warehouse and examine the steps in preparing an order to ship. This article will give an overview of some important steps to consider while getting your product ready to ship. You’ll always want to refer to the customer’s routing guide as the ultimate authority on fulfillment requirements. However, considering the topics below will help you avoid chargebacks, improve processes, and become a preferred vendor to your big-box customer.

Picking the Order

Depending on your system, the first step to picking the order is likely printing a pick sheet. The ideal pick sheet should allow anyone to walk off the street into your warehouse, and with no training at all, be able to pick an order correctly from the information on the pick sheet. I sometimes test a company’s pick sheet by asking someone from another department to pick an order and see what questions he or she asks. Getting to the ideal pick sheet level requires feedback from your team, correct information in your system, willingness to change, and frequent experimentation. One issue to pay particular attention to with the order-picking process is the product’s packaging configuration. Specifically, different big-box retailers often require you to ship the same product in different inner pack, master carton, and assortment quantities. When one of your customer orders four cases of product, that could mean four cases of 48 units to CVS Pharmacy and four cases of 144 units to Walgreens. Your picking system must therefore provide the correct detailed information to distinguish the different configurations and help your team always pick the correct configuration that the customer ordered. Specific bar codes for each configuration, which we will cover in more detail below, can help increase picking efficiency and accuracy. Another issue that many small to medium businesses encounter is the control of pick sheets. Duplicate or missing pick sheets can cause significant problems in your order fulfillment process. As a solution, many small businesses restrict pick sheet printing to just one or two people, who then have complete ownership over the task. Alternatively, you can build a dashboard or other automated system that prevents duplicate picking or missing orders. Eventually, when you can afford to implement a robust warehouse management system (WMS), this issue becomes less troublesome. In addition to avoiding mistakes, you will also want to organize your operations to pick orders quickly. When you are shipping to several large customers, group items in your warehouse based on the customer for whom they are scheduled to ship. For example, if you are shipping six different products to Target, place a pallet of each product in six consecutive picking locations. With your products located accordingly, each Target order is quick and easy to pick. Even if the same product is also shipping to Walmart, stocking it in two locations can greatly simplify the picking process for each of your customers. Positioning products’ pick locations in the same order they appear on the pick sheet is another easy step to decrease errors and simplify the picking process. Once the orders are correctly picked, the next step is to ensure they are labeled according to the customers’ requirements.

Labeling the Product

Ensuring that every label is correct and contains all the necessary information a customer requires is often a difficult task. Many customers are quite strict, charging large fines if labels have incorrect or missing information, are incorrectly placed, or are unreadable. Unless your labeling system is completely automated and you’ve never experienced a problem, ask two people to check all labels. This includes checking to make sure they are placed correctly, scan well, and have all required information. If a customer is particularly harsh in fines and chargebacks, use a written out checklist for labels and have at least one or two other people sign off on the labels. The purpose of labeling product is to process products efficiently and accurately through the supply chain. Most customers require the same basic information on their labels; often you can use the same or a very similar label for various customers. The following are some specific information that customers often require be included on product sent to them:

  • Item Number
  • Item Description
  • Item Bar Code (Either 12-digit or 14-digit)
  • Ship To and Ship From Locations
  • Company/Manufacturer Name and Address
  • Customer PO Number
  • Customer-specific Item Number
  • Number of Cartons
  • Country of Origin
  • Dimensions and Weight
  • Expiration Dates (Perishable Products)
  • Lot Numbers
  • Case pack details (number of inner packs and eaches)

In addition to the above information, some customers require order-specific labeling with information sent to the customer at the time of shipment. These labels include information used in advanced shipment notices (ASNs), which part three will cover. Often, big-box retailers will show an example label in their routing guide. These labels are usually four by six inches, a common size frequently printed by thermal label printers. If you don’t yet own a label printer, talk with your FedEx or UPS representative about using one of theirs. If you ship a steady volume with either of them, they can likely loan you one or more label printers, which will save you some money.

GTIN Prefixes and ITF-14s

Most big-box retailers require you to define bar codes in their systems that designate how your product is packaged. Each product configurations has its unique Global Trade Item Numbers, or GTIN, prefix that defines the package configuration. This two-digit prefix goes in front of the product’s normal 12-digit UPC to create a 14-digit bar code called an ITF-14. For a product that has a UPC of 123456789999, a GTIN prefix of 10 (ITF-14 of 10123456789996), may designate a pack of six. Each Inner Pack and Master Carton Configuration needs its own GTIN prefix defined. While defining prefixes is a straightforward process, there is one exception. The 90 prefix is reserved for variable weight items, such as food, and is often not to beused on standard weight items. In addition, if you have more than eight configurations of a single product, you can then proceed to additional prefixes, starting with 11, 21, etc. The following table gives an example of how one product may have multiple product configurations that utilize the same base 12-digit UPC.

Description GTIN Prefix ITF-14 Bar Code, Including End Check Digit
Individual Item None (UPC Only) 123456789999
Inner Pack of 3 10 10123456789996
Master Carton of 144, with 48 Inner Packs of 3 20 20123456789993
Inner Pack of 6 30 30123456789990
Master Carton of 144, with 24 Inner Packs of 6 40 40123456789997
Master Carton of 48, with 16 Inner Packs of 3 50 50123456789994
Master Carton of 30, with 5 Inner Packs of 6 60 60123456789991
Master Carton of 288, with 48 Inner Packs of 6 70 70123456789998
Pallet containing 55 Master Cartons of 144, with 24 Inner Packs of 6 80 80123456789995
Used for variable weight items such as food, often not allowed for standard weight items 90 90123456789992
Pallet containing 55 Master Cartons of 144, with 48 Inner Packs of 3 11 11123456789995
Pallet containing 165 Master Cartons of 48, with 16 Inner Packs of 3 12 12123456789994

You will want to work with the retailer and your own internal system to set up all these configurations and ensure your product is labeled accordingly. GS1, the creaters of the GTIN system, have a website that provides  a more in depth description of how to calculate the check digit, as well as additional details about the GTIN system.

Promotional and Other Labeling

Depending on the type of order your customer sends, your product might also require special promotion labels, colors, and/or icons. For example, a promotion for Easter may need light blue lines along the outer carton, a picture of an Easter egg, and the words “Eater Feature, Set the Week of Feb. 20.” This type of labeling helps the employees at the final destination store quickly set the product out on the store’s floor. Even if such labeling is not required, I often recommend including a sticker with display instructions, if the customer will not fine you for doing so. Often, that extra label helps get your product out of the back stock room and in front of consumers sooner, generating better sell-through and more reorders. In addition to promotional labeling, you may also want to add other labels to help operations at your customers’ distribution centers (DCs). Big-box DCs process millions of units each week, so anything you can do to help them correctly process your product will help both of you avoid a multitude of problems that occur when product is poorly labeled. Once again, refer to the customer’s routing guidelines, but if allowed, using bright, colored labels to call out the lead carton that contains the packing list or partial cartons will help the DCs avoid mistakes. A simple rule of thumb is that if an eight-year-old would have questions about of how to receive your product, then your labels could be easier to understand. Sometimes it may seem like overkill, but if it helps avoid chargebacks and gets your product in front of consumers quicker, then it’s likely worth the extra effort.

Concluding Thoughts

Crafting strong processes with your people and systems is essential as you gain new customers. Checklists and clear direction will ensure you fulfill big-box orders smoothly and without errors. When you bring on a new customer, download their entire vendor routing guide and read through it completely. Make a detailed list of special requirements. Then, take that list, and create a system to ensure all those requirements are fulfilled and verified. You could start by condensing the list into a checklist, and program that checklist to print on each pick sheet for that customer. When that customers’ orders print, you and your team will know right away what to do for that customer. While this method works well, there’s also many other ways to fulfill this need. What’s important is putting a system in place, experiment on improving it, and contacting the customer with questions when guidelines are unclear. The end goal is to get your product into consumers’ hands, so whatever creative solutions you can invent to accomplish that are worth your effort. Above, we explored several parts of the fulfillment process involved with preparing an order. In the third and final article of this series, we’ll complete the cycle by shipping the product. What experiences do you have with preparing shipments for big-box retailers? What additional questions do you have? While I’ve definitely seen mistakes, I would love to share any advice that will help you get it right. Please leave your success stories or questions below in a comment, and click here to receive future Supply Chain Cowboy articles by email.