Changing to Sears Holdings Vendor Compliance Policy

May 22, 2008

Sears and Kmart update the compliance policy effecting purchase order On Time Delivery, and EDI 856 Ship Notice/Manifest (ASN)

As part of the continuing harmonization process of Sears and Kmart systems, procedures and requirements, we are making changes in our vendor compliance policies for purchase order On Time Delivery and the EDI 856 Ship Notice/Manifest (ASN) effective with shipments received beginning on July 15th, 2008.

On Time Delivery

Currently, all collect and prepaid LTL and TL deliveries to Kmart DC facilities are measured within a 2 business day window – one business day before the Ship To Arrive (“STA”) date (prepaid shipments) or the scheduled pick-up date (collect shipments), or on the Ship To Arrive (“STA”) date or the scheduled pick-up date.

Effective with shipments received beginning on July 15th, 2008, collect and prepaid LTL deliveries to Kmart DC facilities will be measured within a 4 business day window – 3 business days before the Ship To Arrive (“STA”) date (prepaid shipments) or the scheduled pick-up date (collect shipments), or on the Ship To Arrive (“STA”) date or the scheduled pick-up date. In addition to the above, the non-compliance expense offset charge for On Time Delivery to Kmart DCs will be changed to a flat 5% of purchase order cost for all non-compliant deliveries beginning on July 15th. Currently, the charge is a flat $400 (ad merchandise) or $200 (non-ad merchandise) plus 2%, 6% or 10% of the purchase order cost based on the number of days of delivery variance.

EDI 856 Ship Notice/Manifest (ASN) Compliance

Currently, Kmart vendors and Sears vendors shipping to the Kmart DC facilities are assessed an expense offset charge of $150 per DC stock (non-JIT) purchase order or $300 per JIT (cross-dock) purchase order for each shipment received manually due to not having a valid ASN.

Sears vendors shipping to Sears Retail Replenishment Center (“RRC”) and Tire Distribution Centers (“TDC”) facilities are assessed an expense offset charge of $1 per-carton when an EMP (cross-dock) or DOS (DC stock) shipment must be held due to no ASN, $3 per-carton when an invalid ASN must be fixed in the ASN Hospital, or $5 per-carton when an EMP or DOS shipment must be manually received.

Effective beginning with shipments received on July 15th, 2008, the following new ASN compliance policies will be in effect for all shipments to Kmart Regional Specialty Center (“RSC”) and Regional Distribution Center (“RDC”) facilities and Sears RRC and TDC facilities:

Expense Offset – EMP & JIT (Cross-dock) Shipments:

  • $1 per shipping carton when a shipment must be held while the vendor is contacted regarding a missing or invalid ASN
  • $3 per shipping carton for each invalid ASN received that must be corrected in the ASN Hospital
  • $5 per shipping carton for each shipment manually received due to a missing or invalid ASN *

* Most JIT shipments cannot be received without a valid ASN and must be returned to the vendor. The vendor will be assessed $300 for each JIT shipment that must be returned due to a missing or invalid ASN. In addition, the vendor will be responsible for arranging the transportation and the freight cost for each returned shipment.

Expense Offset – DOS & DC Stock (non-JIT) Shipments:

  • $150 per purchase order for each shipment manually received due to a missing or invalid ASN.

These new compliance policies will be included in the scheduled May update to the Compliance section of the Sears Vendor Information Guide and the Kmart Vendor Information Manual.

We encourage all vendors to take whatever action is needed to ensure that a valid ASN is transmitted for every shipment. For questions regarding these new policies, please contact Michelle Bubulka via email to mbubulk@searshc.com.