Supply Chain News

Keeping Pace with Walmart’s On-Time Delivery Requirements

Walmart announced new "On Time & In Full" or OTIF guidelines for suppliers, and is the next evolution of the Supply Chain Reliability program, the last big buzzword was "Must Arrive By Date" or MABD, which generally required you to deliver your products within a 4 day window, but the big change with OTIF is that you now need to deliver your products within a 1 day window and on the exact date, and it must be the full purchase order.

Starting in August 2017, Walmart began implementing its “on-time, in full” (OTIF) delivery standards that have their suppliers looking for ways to remain compliant and in Walmart’s good graces.

Walmart is cracking down on suppliers that deliver their orders late, or even early, accepting only items that are delivered on time.

Impact on Suppliers and Vendors

According to Walmart’s on-time delivery standards, suppliers have two days from the requested Ship/Delivery date on the order by which to deliver their orders to the various distribution centers. Anything that arrives after the two-day window will be fined, as well as anything delivered a day early (to avoid creating overstocks). Orders that are not shipped in full will also be fined.

As Bloomberg reported it, they are requiring “full-truckload suppliers of fast-turning items - groceries, paper towels - to ‘deliver what we ordered 100 percent in full, on the must-arrive-by-date 75 percent of the time.‘” Companies that have items that are late or missing during a one-month period will be fined 3 percent of the value of that order.

These on-time delivery standards also mean Walmart is not accepting weather, or shipping problems as acceptable reasons for the delay. Suppliers need to monitor weather forecasts and make the necessary arrangements to make deliveries on time. If they determine the supplier is at fault, they’ll bear the 3 percent fine; if it’s the carrier, they’ll carry it. And if you don’t agree with the fine? That doesn’t matter, because “disputes will not be tolerated.”

Further, that 75 percent OTIF figure will climb to 95 percent as of February 2018. This is going to be a problem since the current OTIF rates for their top 75 suppliers are as low as 10 percent.

As far as the LTL suppliers go, they’re only expected to deliver OTIF 36 percent of the time (although that threshold is 33 percent right now).

Impact on the Market and Supply Chain

Walmart isn’t the only retailer to do implement strict new on-time delivery standards. Target has already begun enacting their own tighter regulations, although they’re not penalizing for early deliveries. Amazon will most likely follow suit in the near future.

In fact, Amazon is one of the big reason why these changes are happening in the first place (though lowering costs to assist with offering higher wages is also a big part of it). These new requirements are aimed at improving Walmart’s service and product availability while reducing inventory in its warehouses and back rooms. With this variation of a Just In Time inventory strategy, other online retailers may likewise have to look at their inventory strategy if it would help them complete with or keep up with other retailers.

So suppliers will not only have to be on top of their game in serving The Retail Giants, but their retail customers will come to expect this level of performance as well. As the big retailers start creating strict OTIF standards, we expect to see second- and third-tier retailers begin to adopt them as well. Which means suppliers need to step up their game.

Suppliers’ EDI systems need to be streamlined and smooth. There can’t be any hiccups, no entering orders by hand or communicating by fax. Everything needs to be automated, purchase orders and purchase order acknowledgments need to match, and advanced shipping notifications need to ensure they’re transmitting the right information at the right time.

Further, suppliers need to make sure they’re working with reliable 3PLs to manage their shipping, and are able to communicate the necessary information quickly and easily as well. This is where a cloud-based system can help: everything can be shared and transmitted via the cloud, so the information can be read anywhere, anytime, on any device.

Finally, for retailers, having visibility to the suppliers’ performance on shipping against the order can be beneficial for deciding how to improve it. Keeping track of the data and working with the supplier can promote change and encourage vendors to ship deliveries on time for when they’re needed. Or, if the supplier is unable or unwilling to deliver on the retailer’s expectations, they can match up with other suppliers and 3PLs that will.

The SPS Commerce Retail Network is an online community of retail industry businesses, from retailers to suppliers to manufacturers and more. Search for partners based on specific criteria, such as products, geographic reach, or drop-ship capabilities, and begin working with them almost immediately.

Source: SPS Commerce

Image: Michael Nagle/Bloomberg

Retail Networks: The Answer to Omnichannel Integration

Retail networks are becoming a powerful force in the retail industry as thousands of companies conduct millions of transactions per day with other trading partners using the network.

Companies simply integrate their business system of record into these prebuilt communities to completely transform the way they source items and vendors, manage product assortments, fulfill orders, and use data and analytics to collaborate with trading partners.

By joining a retail network, organizations can retain their existing infrastructure while accessing modern, cloud-based technology to enhance their supply chain relationships.

Download the White Paper Retail Networks: The Answer to Omnichannel Integration


Article Topics
Best Practices   Supply Chain   Retail   Omni-Channel   Retail   Walmart   All topics


Comments
1 Comments (displaying chronologically) Post a comment
You must be logged in to post a comment. Login.

 
Latest Supply Chain News
Amazon’s Ever-Increasing Ecommerce Shipping Costs
Amazon is growing fast, and so are the costs of getting people the products they order from the online ecommerce retailer, and as time goes by, Amazon has to spend a higher percentage of its net sales…

Navigating Ecommerce with Your Existing Supply Chain Relationships & Capabilities
The rules for success in e-commerce and omnichannel fulfillment are still being written, however, you can minimize the risks and costs of scaling your operations, and get to market faster, by leveraging…

Using Your Logistics Expertise as a Competitive Weapon When It Comes To Ecommerce
Customers have unlimited buying options at their fingertips - speed to serve, product availability & customer experience have become the new tools in the seller’s arsenal to maintain market competitiveness.

Amazon Begins Grocery Delivery from Whole Foods Market
Amazon plans to roll out two-hour delivery at Whole Foods this year to those who pay for Amazon's $99-a-year Prime membership and is the company's biggest move since it bought the organic grocer last year.


 

24|7 Pro Team

The 24|7 Team is your direct pipeline to solutions for your business challenges. It's your opportunity to have supply chain and logistics experts look at your specific challenges and needs, and give you free, no-obligation advice, solutions, and information.

The 24|7 Team will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

1
  Choose a topic for your RFP

Transportation RFP/RFI

The Transportation RFP is your direct pipeline to solutions for your transportation challenges. It's your opportunity to have logistics experts look at your specific transportation challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect software or system can be an indomitable challenge. Using this transportation/TMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your Request for Proposal list.

Warehouse/DC Management RFP/RFI

The Warehouse Management Systems (WMS) RFP is your direct pipeline to solutions for your WMS challenges. It's your opportunity to have logistics experts look at your specific WMS challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request.

Choosing the perfect WMS solution can be an indomitable challenge. Using this WMS RFP will simplify the task of creating a database of likely partners, building your knowledge base, and preparing your WMS Request for Proposal list.

Supply Chain RFP/RFI

The Supply Chain RFP is your opportunity to have logistics experts look at your specific challenges and needs, and receive free, no-obligation advice, solutions, and information. It simplifies finding a pool of likely partners, building your knowledge base, and preparing your Request for Proposal list. The companies in the Logistics Planner have agreed to respond to your request for in-depth information and follow-up, and your request is totally confidential.

Software/Technology RFP/RFI

The Software/Technology is your direct pipeline to solutions for your logistics information technology challenges. It's your opportunity to have logistics experts look at your specific technology challenges and needs, and give you free, no-obligation advice, solutions, and information specific to your request. Whether it's WMS, TMS, Mobile or Cloud, our pros can help.

The companies listed below have agreed to respond to your request for in-depth information and follow-up. Your request is totally confidential.

Executive Education RFI

The Logistics and Supply Chain Education RFI can help you identify the schools, coursework, continuing education, distance learning and certification opportunities available from leading logistics educational institutions.

Upgrade and improve your logistics and supply chain skillsets. Whatever route you choose—advanced degree, executive education, certification or distance learning—the time and money you invest in your education today can pay off in continued career success tomorrow. Contact leading universities and professional institutions for the information you need to prepare for the future.

Third Party Logistics RFP/RFI

This 3PL Request for Proposal (RFP)/Request for Information (RFI) can help you find the 3PL and 4PL providers that can meet your specific 3PL service challenges and needs. The 3PL companies below will provide free, no-obligation third-party logistics advice, solutions, and information.

Ask your 3PL questions, you'll get answers. Simply complete the information, and detail your 3PL challenges. Then, check off the third-party logistics companies that you want to review your request.

1. Choose an RFI topic.
2. Enter your contact information and challenge.
3. Select companies and optional categories.
4. Submit.


2

Your Information



Your Challenge, Problem or Request *

3

Select Transportation Companies

  • Select All

  • 3Gtms
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Kuebix
  • Landstar
  • Legacy Supply Chain Svs.
  • One Network
  • Pitt Ohio
  • Purolator
  • Quintiq
  • SEKO Logistics
  • SMC3


Select Relevent Categories

  • Air Freight
  • Intermodal
  • Motor Freight
  • Ocean Freight
  • Rail Freight
  • TMS

Select Warehouse/DC Management Companies

  • Select All

  • 3PL Central
  • Apex Supply Chain Tech.
  • Honeywell Intelligrated
  • Kuebix
  • Legacy Supply Chain Svs.
  • Swisslog
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Auto ID & Data Capture
  • Automation
  • Conveyors & Sortation
  • Lift Trucks
  • Packaging & Labeling
  • Pallets & Containers
  • Shelving & Racking
  • WMS

Select Supply Chain Companies

  • Select All

  • 3Gtms
  • 3PL Central
  • Amber Road
  • Apex Supply Chain Tech.
  • APICS
  • BluJay Solutions
  • CSX Trans. Intermodal
  • Frontier Business
  • Kuebix
  • Legacy Supply Chain Svs.
  • Logility
  • One Network
  • Purolator
  • Quintiq
  • SMC3
  • Synchrono
  • TAKE Supply Chain
  • Westfalia Technologies
  • Zebra Technologies


Select Relevent Categories

  • Global Trade
  • Inventory Management
  • Risk Management
  • Sustainability

Select Software/Technology Companies

  • Select All

  • 3GTMS
  • 3PL Central
  • Apex Supply Chain Tech.
  • BluJay Solutions
  • Honeywell Intelligrated
  • Frontier Business
  • Kuebix
  • Logility
  • One Network
  • Quintiq
  • SMC3
  • Swisslog Logistics
  • Synchrono
  • TAKE Supply Chain
  • Zebra Technologies


Select Relevent Categories

  • ERP
  • Sales & Operations
  • Sourcing/Procurement
  • Optimization
  • Transportation Mgmt
  • Warehouse Mgmt

Select Executive Education Choices

  • Select All

  • Graduate Courses
  • Online/Distance
  • Executive Education
  • Certifications
  • Undergraduate
  • Seminars
  • Associations
  • Conferences
  • Tradeshows


Select Third Party Logistics Companies

  • Select All

  • 3PL Central
  • Landstar
  • Legacy Supply Chain Svs.
  • Purolator
  • SEKO Logistics
  • Westfalia Technologies


4
 

24|7 Company Profiles