Many questions still loom around Walmart’s introduction of On Time In Full (OTIF) guidelines for suppliers. While strict adherence to OTIF won’t go into effect until August 2017, strategic companies are working to improve their replenishment processes now. To shed some light on the new expectations, Colby Beland, VP of Sales and Marketing for CaseStack, clarified some of the common issues on a recent episode of Focus on Suppliers.
1. Do the Guidelines Apply to All Suppliers?
Beland affirms that the new guidelines apply to all suppliers.
“It doesn’t matter if you’re a full truckload supplier of a small supplier, everyone is still trying to understand what OTIF is and how it affects his organization. Each company should work to find a way to achieve Walmart’s goals of the OTIF initiative.”
Beland continues with what to look for now: “If you’re a less-than-truckload supplier and your current OTIF is below 33%, or below 75% if you’re a full truckload supplier, it’s time to get to work!”
2. How Do I Know Where I Stand?
Walmart knew suppliers would want to see OTIF performance to plan for adjustments. Beland explains how a supplier can track his current score:
“Suppliers can go into Retail Link. A page has been set up as an OTIF homepage that has all the information for any supplier to see a very detailed scorecard. It allows the suppliers to see issues on their side or issues on Walmart’s side. Walmart is taking ownership of its issues. The interesting thing is there are no exceptions. Whatever the report card shows, there are no exclusions for it.”
Beland also advises on what each supplier can do to make corrections to his or her current issues. “It all starts with the scorecard and the tools that Walmart has made available in Retail Link. The suppliers need to drill down and understand what is driving their individual OTIF metrics. Whether it’s a distribution center issue, a receiving issue, a shipping issue . . . by doing that and discovering what’s driving those metrics, the supplier can develop a plan. The goal is to continually improve to get to the ultimate goal of Walmart’s 95% one-day in full.”
3. When Do Penalties Begin?
One of the biggest questions Beland and the team at CaseStack receive deal with penalties for non-compliance to the guidelines.
“Many suppliers are asking ‘When do I get fined?’ and ‘What is the fine?’ Walmart has set a baseline for OTIF. Whatever your OTIF measured in January of 2017, that will be your baseline for the next fiscal year.”
He goes on to explain the goal, “Walmart wants you to improve upon that by 10%. Penalties and fines for OTIF will go into affect in August of this year. Suppliers will likely see their first invoice in September.”
4. How Can I Prepare Now for On Time In Full?
The most sound advice for all suppliers from Beland is not to wait.
“Get in front of it now. The penalties start in August. If you don’t have a game plan, if you don’t have a team to work on it, you need to find a company like CaseStack that can help establish an OTIF solution to drive the metrics.”
You can learn about partnering with CaseStack by visiting their website.