We’re prepping Q2 buys and I’m weighing consolidating two mid‑volume suppliers if the winner commits to 2/10, net 45 and 95% OTIF — have you seen better total landed cost from consolidation, or do you keep a backup to protect in‑stock? Batching POs into one Tuesday release cut our LTL freight by 6% last month, but I don’t want service levels to slip during promo weeks.
I’d do a 90‑day pilot: award about 80% to the ‘2/10, net 45’ winner on a volume ladder and keep 20% warm with a small monthly MOQ, plus a promo‑week buffer (1.2x forecast) so the freight tail doesn’t wag the service dog. If they hit 98% on promo weeks and maintain ‘95% OTIF’, roll them to 100%; if they miss, auto‑rebalance the split. Do you have late/short chargebacks tied to OTIF to enforce it?
Consolidate, but bake in a promo-week SLA: if they miss 95% OTIF during promo windows, they owe a 1% credit on late lines and prebuild 2 weeks of safety stock at their DC by Friday before your Tuesday release. The ‘2/10, net 45’ carrot is solid — just keep a tiny backup on the top 15 SKUs and trigger it only when ASNs slip 24–48 hours so your 6% LTL win doesn’t vanish. You good making the credit automatic off EDI 214/856 timestamps?
We saw better landed cost by shifting two mids onto a single multi‑stop TL tied to your ‘one Tuesday release’ — it kept the ‘6% LTL’ benefit and cut damage claims — but we only green‑lit consolidation after adding a promo rule: promo SKUs must be ready to ship Monday 10am with EDI 214, or they auto‑route to the backup. If your winner will accept that gate alongside early‑pay, you’ll get the savings without risking promo weeks — want me to share the two‑line clause we used?
Consolidate, but make them hold 1–2 weeks of pre‑allocated safety stock at their DC (vendor‑owned until you pull) tied to the Tuesday release so you keep the freight win. If they miss your promo capacity reservation, auto‑shift 15% to the backup the next cycle; @mateo51’s route idea plus this buffer is cheap insurance — would they carry that stock?
Add a ‘surge capacity reservation’ clause — 20% buffer, vendor-funded expedite if they miss; thoughts?