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Vendor Chargebacks: intension vs. reality
Subscriber Forum: In this issue we are answering questions from readers.
David Ashear wrote us in November after hearing about "Life's Leadership Lessons", the new
book from Max Impact founder Rick Weaver: You have a book that talks about “The Vendor
Chargeback Program”?
Actually the book contains only one chapter about vendor chargeback programs. The book
looks at the people, events, andthings that have taught me important aspects about leadership
throughout my life. The book would not be complete without atleast discussing the chargeback
program at Kmart. I had the misfortune of being involved in this program at its inception.
The now defunct Andersen Consulting that sold the initiative to Ron Floto, then Kmart Vice
President. Paul Foley and myself were the instrumental developers for the merchandising team.
Paul and I knew there were problems right from the start. Andersen Consulting expected the program to increase on-time
deliveries from Kmart's vendors by creating a pain threshold for noncompliance. Floto, Foley, and I thought the program would
only work if it was completely fair and had a goal of raising shipment issues to the point of discussion and investigation.
Although we never the saw the program as being a revenue generator, Foley and I confided in each other that if the program
was ever budgeted, it would completely destroy vendor relations.
The other side of the guillotine
As fate would have, I am now on the other side of the compliance table. We deliver workshops to a major corporation that runs
a chargeback program, particularly for raw goods suppliers in there just in time delivery system. Like Kmart's program they have
automated aspects of the program, using delivery receipts as an indicator. Even though we supply the proper paperwork within
24 hours after each seminar, it never agrees with the original purchase order as a number of attendees fluctuates at the last
moment. Therefore they continually want to charge us for not delivering as ordered.
My guess is that many of the Kmart vendors reading this are having a good chuckle about now. I do not blame them.
By not looking at the negative side of any new program, procedure, or policy can lead to failure, even bankruptcy. This is what
the book talks about. To learn more, click here.
©2008 Max Impact Corporation
Subscriber Forum: In this issue we are answering questions from readers.
David Ashear wrote us in November after hearing about "Life's Leadership Lessons", the new
book from Max Impact founder Rick Weaver: You have a book that talks about “The Vendor
Chargeback Program”?
Actually the book contains only one chapter about vendor chargeback programs. The book
looks at the people, events, andthings that have taught me important aspects about leadership
throughout my life. The book would not be complete without atleast discussing the chargeback
program at Kmart. I had the misfortune of being involved in this program at its inception.
The now defunct Andersen Consulting that sold the initiative to Ron Floto, then Kmart Vice
President. Paul Foley and myself were the instrumental developers for the merchandising team.
Paul and I knew there were problems right from the start. Andersen Consulting expected the program to increase on-time
deliveries from Kmart's vendors by creating a pain threshold for noncompliance. Floto, Foley, and I thought the program would
only work if it was completely fair and had a goal of raising shipment issues to the point of discussion and investigation.
Although we never the saw the program as being a revenue generator, Foley and I confided in each other that if the program
was ever budgeted, it would completely destroy vendor relations.
The other side of the guillotine
As fate would have, I am now on the other side of the compliance table. We deliver workshops to a major corporation that runs
a chargeback program, particularly for raw goods suppliers in there just in time delivery system. Like Kmart's program they have
automated aspects of the program, using delivery receipts as an indicator. Even though we supply the proper paperwork within
24 hours after each seminar, it never agrees with the original purchase order as a number of attendees fluctuates at the last
moment. Therefore they continually want to charge us for not delivering as ordered.
My guess is that many of the Kmart vendors reading this are having a good chuckle about now. I do not blame them.
By not looking at the negative side of any new program, procedure, or policy can lead to failure, even bankruptcy. This is what
the book talks about. To learn more, click here.
©2008 Max Impact Corporation
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| January 10 2008 |