Walmart just concluded their 2019 Supplier Summit in Rogers, Arkansas, and quite a bit of the conversation was directed at OTIF … specifically, the upcoming changes to the program.
If you are a current Walmart supplier and are unaware of OTIF, the acronym stands for “On-time / In-Full” and references Walmart’s expectations relating to supplier order fulfillment. On-Shelf Availability is a huge metric that Walmart monitors on both a corporate- and store-level. In the recent Supplier Summit, Walmart estimated that “In-Full performance was worth $1.7B in lost sales in 2019”.
That’s $1.7 BILLION dollars in lost sales, due to suppliers not delivering in-full on their orders.
In response to this staggering number, Walmart is revising the OTIF program to separate In-Full from On-Time, allowing the metrics to be monitored (and thus, potentially fined) separately. This could negatively impact some suppliers who are currently in compliance with the current OTIF initiative.
Some key highlights to the new program include:
- Separates the in-full and on-time metrics, allowing assessment of fines for non-compliance independently.
- New visibility and a simplified program (beginning May 2019)
- Raised In-Full expectations:
- GM / H&W categories: 95% fill rate
- Food / Consumable categories: 97.5% fill rate
- On-Time expectations are broken out by your freight terms, so you can focus on resolving what you can control:
- 87% FTL / 70% LTL
- Delivery Window:
- Grocery DCs: 1-day window (on MABD)
- Regional DCs: 2-day window (MABD and 1-day prior)
- 95%, keyed and ready for on-time pickup
- Request for routing keyed within 24 hours
- Loads ready for pickup by Ship On Date
- Suppliers will not be double-charged for on-time and in-full deficiencies for the same case.
- Supplier Performance Management (SPM)
- Types of Charges:
- In-Full (GM / H&W)
- In-Full (Food / Consumables)
- On-Time (prepaid)
- On-Time (collect ready)
- Types of Charges:
- Any type of charge (on a monthly basis) less than $1,000 is excluded.
- Invoices (i.e. fines) will be the sum of up to 4 charges with a $1,000 threshold.
Obviously, these are major changes from the current program. Therefore, it is imperative that your team understand what is changing and how it will impact your operations (and potentially your bottom line).
We will be offering a 2-hour webinar on the new program starting in early April. For more information on the program, please visit the course page at:
Walmart OTIF Fundamentals webinar
What are your thoughts on the new OTIF program? Ask your questions in the comments below, or contact me directly at firstname.lastname@example.org.