(Editor’s note: Are you a new supplier working with Walmart? Understanding the OTIF process is a must! Click here to talk with one of our advisory experts to get your questions answered before your next buyer meeting.)
There’s a new metric in town. If you’re a Walmart Supplier, your replenishment focus is now centered around four letters: OTIF. On Time In Full should prove to be a big win for everyone.
Joel Graham, Director of Client Services for 8th & Walton, recently discussed the impact of OTIF on suppliers during the Conference Call podcast. “Walmart is raising its expectation of suppliers regarding the supply chain. Suppliers just need to figure out the best way to improve their supply chain and logistics so that they can hit a metric to improve the flow of inventory.”
OTIF Is a Transition From MABD
Suppliers working with other retailers understand the Must Arrive By Date (MABD). Even with a given day of expected delivery, there is usually figured in a grace period for early or late arrival. When Walmart decided to transition the MABD into the OTIF concept, suppliers were hit with new expectations. Graham has worked on both sides of the retailer/supplier table. He helps suppliers today understand what part MABD plays in OTIF, but how the bar has been raised to help with inventory flow.
“Walmart is taking its Must Arrive By Date (MABD) to the next level by raising expectations on both On Time and In Full,” Graham explains. “When you think about it, On Time is still the Must Arrive By part of MABD.
“The ‘On Time’ part of delivery moved to a 2-day window for general merchandise and a 1-day window for food and other things like Health and Beauty, so the window for delivery is compressed, too.
“And there’s a renewed focus on In Full. If you’re short-shipping your cases, Walmart has also clarified those expectations.”
How Suppliers Can Achieve the OTIF Metrics
With the tools that Walmart has provided in launching OTIF, suppliers get the whole story. You’re not simply able to see your metrics, but also analyze the numbers to pinpoint areas for improvement. Graham goes on to explain how a supplier can best use the new tools they are given to meet the Walmart guidelines.
“The best way to meet the metrics is to understand your supply chain,” he says. “Get the knowledge and tools you need to analyze if there is a breakdown and where improvements are needed. Is it the carrier? The lead time? Find the supply chain metric that needs to be improved.”
How OTIF Helps Drive Sales Growth at Walmart
The OTIF application in Retail Link allows suppliers to see evidence of supply chain issues that are contributing to out-of-stocks or unnecessary inventory. With this visibility, suppliers can develop collaborative action plans and partner with their Walmart Supplier Solutions Manager to resolve those issues.
Resolving root cause supports sales growth and reduces handling costs. It also frees up supplier resources from large amounts of exception management analysis and allows a more forward focus on modular, event, and seasonal planning.
Suppliers Can Learn OTIF Now
Suppliers needing the knowledge and tools to help with OTIF are just a click away from updated resources. The 8th & Walton OTIF class is available now. Click here for more information or to sign up.
You don’t have to be in Northwest Arkansas to take a class: The 8th & Walton Merchandise Advisers are ready to come to you. “We teach in almost every major metro city,” Graham says,”We have teams in Canada, and we host webinars. Your team doesn’t have to travel to a class; they can take the class from their desks in your own offices.”
No time for a class? Or are you a small to mid-sized supplier with limited resources to track OTIF reporting and analysis? No problem! The OTIF experts at 8th & Walton do much more for your business than teach classes. Advisers here can do the work for you, saving you time and payroll each week.
The advisory team at 8th & Walton came from the supplier world. They already understand the system and Walmart’s expectations. As it relates to OTIF, it’s another reporting metric that can be taken off your plate so you can focus on growing your business in other areas.
Questions about advisory support, classes, locations, arranging webinars, or general inquiries can be answered immediately through the 8th & Walton chat.
Suppliers See Improvements Quickly
Many suppliers have already taken their teams through the 8th & Walton OTIF class. From the clarity of the new guidelines to the deep dive of the OTIF scorecard, all aspects of refining the process are proving beneficial. While the anecdotal evidence has been great, the real excitement is in the numbers. One supplier was generous enough to share his improved OTIF score after going through the class:
“We started out by working with Walmart to update the settings — lead times and order minimums in its system – and are still working to fine tune the settings. But here’s the exciting result: Just a few weeks after taking the 8th & Walton OTIF class, we went from a 38% OTIF to a score of over 85%. We are well on our way to reaching the 95% OTIF score before 2018!”
OTIF Is a Solid Improvement
Graham reassures suppliers that in the end, OTIF is another positive from Walmart. “OTIF is a good move for everyone, he concludes. “Honestly, the new On Time In Full scorecard is one of the best tools for measuring inventory flow that we’ve ever seen. Actually, it’s more than a scorecard; it’s a dynamic reporting mechanism. Giving suppliers this tool shows that Walmart wants the flow of product to be smooth and steady — and in the stores for customers. Ultimately, that’s what we all want.”
Updates to Walmart’s OTIF initiative and other processes roll out each month. Talk with an 8th & Walton adviser to ensure your business is in step with Walmart’s expectations. Don’t forget to listen to our entire interview with Joel Graham by clicking here.