Walmart Eases Up on On-Time, In-Full Shipment Requirements

Walmart's recent update brings a lighter load for suppliers, dialing down the 'on-time, in-full' (OTIF) shipment requirements to 90% and 95%, respectively, from the steep 98% set during the 2020 demand surge. Here's the lowdown:

Previously: In 2020, amid pandemic chaos, Walmart cranked up OTIF targets to 98% to beef up against its competitor Amazon.

Now: They've relaxed OTIF standards to 90% on time, 95% in full.

Why: To better manage inventory and streamline online order fulfillment.

Stakes: Vendors missing the mark face fines—3% of the goods' cost.

Larger Context: The pandemic saw packaged goods companies' on-time, in-full deliveries drop from 85% (Q1 2020) to 77% (Q4 2020). In 2023, deliveries improved, hitting an 84% on-time average, according to FourKites data.

Experts and logistics providers see Walmart easing up as a positive shift, acknowledging the unpredictable nature of deliveries. Several factors can derail the best-laid plans, from traffic delays and truck breakdowns to product mix-ups.

Walmart's adjustment reflects a return to more normal operations post-pandemic and aims to ease the pressure on suppliers. This move is seen as a win-win, enhancing flexibility and efficiency for both Walmart and its suppliers.

Source: WSJ