Field guide · Compliance prevention
An upstream prevention guide organized by the timeline of a purchase order. At each stage — acknowledgment, pickup, shipment, delivery, and closeout — there are specific checks that prevent compliance fees from triggering. This guide maps every check, the fee it prevents, and the evidence to collect before the truck moves.
For CPG operations, logistics, and finance teams shipping through KeHE distribution centers.
Direct answer
Every KeHE compliance deduction starts with a missed check upstream. A late EDI 753 becomes a late delivery becomes a $250 fee. A mismatched case count becomes a UDR becomes a 3% fill-rate fine. A skipped pallet placard becomes a sort-and-segregate charge. The fees are documented in the compliance guide. This guide focuses on what to verify before each fee has a chance to trigger.
The structure follows the lifecycle of a single PO: from the moment KeHE sends the 850 to the post-delivery metrics review. At each stage, there are specific checks. Miss one, and the compliance cascade described in the late PO guide begins.
Stage 1 · First 24 hours
The first 24 hours after the EDI 850 arrives set the trajectory for the entire order. Four checks here prevent the most common downstream failures.
Send the EDI 855 within 24 hours of the 850
The PO acknowledgment is the first compliance checkpoint. Missing the 24-hour window does not carry a direct fee, but it blocks the EDI 810 invoice and signals to KeHE that the order may not be managed. Start the clock the moment the 850 arrives.
Verify item master matches (UPC, case pack, description)
A mismatched UPC or case pack count between your system and KeHE's item master causes receiving discrepancies at the DC. These show up as shortages or overships on the UDR even when the right product was delivered. Verify before you pick, not after you ship.
Confirm ship window and appointment availability
The PO specifies a ship window. Before acknowledging, confirm that the window is achievable given current inventory, production lead times, and carrier availability. An acknowledged PO that cannot ship on time is worse than a delayed acknowledgment.
Check inventory allocation against the PO quantity
If available inventory does not cover the full PO quantity, decide now whether to ship partial or request a PO change (EDI 860). A planned partial filed in advance is a controlled decision. A surprise short-ship at the dock is a 3% fill-rate fee.
Stage 2 · 3+ business days out
The period between acknowledgment and pickup is where the most preventable fees originate. EDI 753 timing, appointment scheduling, pallet compliance, and temperature verification all happen here.
The 753 is the ready-to-ship notice for KeHE Pick Up and FOB orders. Missing the 3-business-day deadline can delay carrier dispatch and cascade into a late delivery, even when inventory is staged and ready. This is the most commonly missed EDI deadline.
Delivery appointments must be scheduled through C3 Reservations at least 7 days before the delivery date, with separate credentials for each DC. A missed scheduling window means the shipment cannot be received. No-show fee: $250. Same-day cancellation: $250.
KeHE requires standard GMA pallets (48x40 inches, 4-way entry). Maximum weight is 2,500 pounds per pallet. Maximum height is 72 inches including the pallet. Non-compliant pallets trigger extra handling fees: $75 for pinwheeled pallets, $400 for floor-loaded trailers.
Every pallet must be placarded with the KeHE PO number and the destination distribution center. Missing or incorrect placards trigger sort and segregate fees ($85 / $110 / $160+ depending on severity) because the DC must manually identify and route the product.
Temperature non-compliance at delivery is a rejection risk, not just a fee. Refrigerated product must arrive between 34-40°F, proteins between 28-40°F, and frozen product between -20-0°F. Document the pre-load temperature with a photo of the thermometer or data logger.
Stage 3 · At shipment
Once the carrier takes possession, your ability to prevent fees drops to near zero. Everything you can control happens before handoff. These four checks are your last line of prevention.
The advance ship notice must include lot-level detail for FSMA 204(d) traceability. One ASN per shipment. The ASN is what the DC uses to verify the incoming load against the PO. A missing or inaccurate ASN causes receiving delays and discrepancy reports.
KeHE scans case barcodes at receiving. If your scan rate falls below 95%, a 3% non-compliance fee applies. This is a product-level metric, not a shipment-level metric. Test your case barcodes before shipping. A single unreadable barcode format can pull the entire SKU below threshold.
Take timestamped photos of every pallet before the carrier takes possession. These photos are your primary evidence if a damage or shortage dispute arises at the DC. Without pre-shipment photos, you have no counter-evidence to a UDR claim. This is the cheapest insurance in the supply chain.
The bill of lading must match the ASN case counts and PO references. A mismatch between BOL and ASN is the most common source of receiving discrepancies. The DC trusts the ASN for system receiving and the BOL for physical verification. If they disagree, a UDR is almost certain.
Stage 4 · At delivery and receiving
Once the shipment arrives at the DC, monitoring shifts from prevention to evidence preservation. The UDR response window is 48 hours. If you are not watching for it, the DC’s count becomes the record of truth.
Monitor for UDR (Unloading Discrepancy Report) within 48 hours
Per P&P section 6.6, KeHE issues UDRs when a delivery does not match the ASN or BOL. You have 48 hours to respond with counter-evidence. Miss the window and the DC's count stands. Set an alert for every delivery and check for UDRs within 24 hours, not 48.
If UDR received: respond in writing within 48 hours with counter-evidence
A UDR response requires specific evidence: the BOL with carrier signature, pre-shipment photos, ASN detail, and any relevant temperature logs. A generic "we shipped the right amount" response does not meet the standard. KeHE expects documentation, not assertions.
Check fill rate calculation against your shipment records
KeHE calculates fill rate as cases received divided by cases ordered. If the DC says they received 184 of 200 cases and your BOL says 200, the difference is your dispute. But you need the evidence assembled before the UDR response window closes.
Document any appointment changes initiated by KeHE
If KeHE or the DC moves your appointment and the change causes a late delivery or no-show, the fee should not apply to you. But you need the C3 Reservations record showing who initiated the change. Export and save the appointment history before the dispute window opens.
Stage 5 · After delivery (ongoing)
Post-delivery is where the operating loop connects back to the start. OTIF metrics, discontinuation risk, and pattern analysis feed the upstream changes that prevent the next round of fees.
KeHE measures fill rate and on-time delivery quarterly. Fill rate below 95% triggers a 3% service level fine on affected POs. On-time delivery below 85% triggers a $250 fee on every late PO in that quarter. Both thresholds are measured by quarter, so a bad month pulls the trailing average down.
Per P&P section 6.5, 60 consecutive days of non-shipment on an item can trigger product discontinuation from the KeHE catalog. Discontinuation requires full re-onboarding. If you are approaching 30 days without a shipment on any SKU, investigate and resolve before the clock runs out.
A shortage that happens once is a receiving error. A shortage that happens three times at the same DC is a systemic issue: a labeling problem, a pallet configuration issue, or a DC-specific receiving practice. Pattern analysis turns individual disputes into upstream fixes.
The deduction management loop closes when the prevention loop starts. Every disputed shortage, every late-delivery fee, and every appointment penalty should feed a specific change: a routing adjustment, a documentation improvement, or a fulfillment process fix.
The fee cascade
A single late partial shipment can trigger multiple independent fee mechanisms on the same PO. These are not alternative penalties — they compound. The cascade below shows the worst-case scenario for one order.
Quarterly OTD drops below 85%
Missed the C3 delivery window
Partial ship pushed fill rate below 95%
Non-compliant pallet or floor-loaded trailer
One late partial PO, compounding fees
Fee amounts verified against the KeHE IBR Fee Schedule and P&P. For the complete fee reference, see the compliance guide. For the full cascade analysis, see what happens when a KeHE PO ships late.
What to measure
Prevention programs that do not measure outcomes become checklists that get ignored. These three metrics close the feedback loop.
95%
Target threshold
Cases received divided by cases ordered, measured by KeHE at the DC. Below 95% triggers the 3% SLF on affected POs. Track weekly, not quarterly — by the time the quarterly number drops below threshold, the fees have already accrued.
85%
Target threshold
Percentage of POs delivered within the scheduled appointment window, measured quarterly. Below 85% activates the $250 per late PO fee for the entire quarter. A single bad week can pull the trailing average below threshold.
Track trend
No fixed threshold
The percentage of disputed deductions that result in a credit. A rising win rate means your evidence quality is improving. A falling win rate means either the disputes are weaker or the upstream failures are genuinely your responsibility. Both signals are useful.
The Intelligent PO™ connection
The workspace monitors every checkpoint in this guide: the 24-hour 855 deadline, the 3-business-day 753 deadline, the C3 appointment window, carrier pickup confirmation, and the 48-hour UDR response window. When a deadline is at risk, it surfaces before the fee triggers.
Photos, BOLs, ASNs, carrier events, appointment records, and temperature logs attach to the PO as they happen — not after a deduction lands. When a UDR arrives, the counter-evidence is already assembled. When a fee disputes, the evidence packet is ready to file through K-Solve.
For how this fits into the broader system architecture, see the architecture guide.
Frequently asked
OTIF stands for On-Time In-Full. For KeHE, the relevant metrics are on-time delivery (OTD) measured quarterly with an 85% threshold, and fill rate measured with a 95% threshold. On-time delivery below 85% triggers a $250 fee per late PO for the quarter. Fill rate below 95% triggers a 3% service level fine on the affected POs. Both are measured by KeHE at the DC receiving level, not at the point of shipment.
The 3% service level fine (SLF) triggers when fill rate drops below 95% on a PO. Fill rate is calculated as cases received divided by cases ordered. If KeHE ordered 200 cases and the DC says they received 190, the fill rate is 95% and no fee applies. At 189 cases (94.5%), the 3% SLF applies to the shortage value. The fee is assessed on the affected PO, not on the overall account fill rate.
Yes, if you have evidence that the no-show was not your fault. The strongest disputes show that the appointment was changed or cancelled by KeHE or the DC, not by the supplier. Export the appointment history from C3 Reservations showing who initiated the change. If a carrier delay caused the miss, carrier tracking events showing on-time pickup and transit delay can support the dispute. File through K-Solve within the 180-day window.
OTIF failures are the upstream cause of most compliance deductions. A late delivery (OTD miss) can trigger the $250 late shipment fee, a $250 no-show fee, and a $200 reschedule fee. A partial shipment (fill rate miss) can trigger the 3% SLF. These fees appear as deductions on the remittance. Preventing OTIF failures upstream is cheaper than recovering deductions downstream. For the full deduction management process, see the deduction management guide.
The Intelligent PO workspace tracks every PO through the timeline described in this guide: acknowledgment, EDI deadlines, appointment scheduling, shipment, delivery, and post-delivery monitoring. When a deadline is at risk, the workspace surfaces it before the fee triggers. When a deduction does land, the evidence packet — BOLs, ASNs, photos, carrier events, appointment records — is already assembled from data attached to the PO throughout its lifecycle. Prevention and recovery run on the same evidence chain.
Free audit
Upload your K-Solve export. The audit classifies each deduction, maps it to the prevention checkpoint that was missed, and estimates what is recoverable vs. what should have been prevented. No sign-up required.
Related reading
Evidence boundary: All fee amounts, thresholds, and policy references in this guide are sourced from verified KeHE documentation including the Policies & Procedures manual, the IBR Fee Schedule, and C3 Reservations documentation. KeHE may update these policies at any time. Confirm current terms directly with KeHE or through your KeHE account representative before making compliance or dispute decisions.
