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The Walmart On Time In Full (OTIF) initiative saw various updates in 2018. From changing delivery windows to adjusting the exception process, Walmart is working toward the end goal of keeping shelves stocked for customers. During the process, suppliers continue to struggle with meeting deadlines and face the growing issue of truck driver capacity.
Colby Beland, Vice President of Sales and Marketing for CaseStack, sat down with us to talk about the reality of OTIF in 2019. With possible updates to OTIF in light of a truck driver shortage, Colby has sound advice for current Walmart suppliers and those hoping to work with the company this year.
A Shortage of Truck Drivers
Colby and his team at CaseStack work to consolidate truckloads and set appointments for suppliers. Being on the front lines of supply chain logistics, the need for more truck drivers is a reality he sees each day. As he explains, Walmart understands the shortage as well and is taking notable action:
“Capacity is tight. It’s not tight because of equipment availability, but truly because there aren’t enough seats. There aren’t enough people to put a seat in a seat,” he explains. “Walmart is impacted by capacity in its own fleet. You’re seeing the changes that they’re making from referral bonuses for drivers to social media campaigns. They’re doing everything they can to create driver awareness.
“At the end of the day, commerce in America doesn’t work without a truck driver. Everything is delivered on a truck. It’s a true challenge that the industry faces. We’re about 300,000 drivers short today based upon the capacity demand and it’s only going to get worse. If you look at the average age of a truck driver (somewhere between 55 and 60), retirement is looming.”
This challenge the industry faces isn’t going away soon. With more drivers at the age of retirement, it’s hard to find new applicants to “take the wheel,” figuratively and literally! Colby watches the trends for the future of logistics and explains something must change to avoid a future crisis.
“The millennial generation does not want to drive a truck,” he says. “If you look at all the marketing studies of what millennials are interested in, they’re not attracted to the truck driving industry. It’s going to create a lot of challenges for capacity going forward. Carriers, the companies that actually own trucks, are having to figure out a way to recruit and bring drivers into the industry.”
What Can Change for OTIF in 2019?
Overall, Walmart has seen success with the OTIF initiative. After the initial launch, some changes went into effect, and more may be on the horizon. Colby brought us up to date on what the last year has yielded and gave insight into what can be announced soon.
“Walmart made a pretty big adjustment going from the expected 95% back down to 85%,” he begins, “and going from a 1-day window to a 2-day window. I think they’re seeing the results that they want.
“I can’t speak for Walmart, but the performance that the suppliers have made is pretty significant. It’s a realistic expectation; 85% in a 2-day window is very achievable. Walmart’s ultimate goal is 95%. I believe they can get to 95% with a 2-day window. The 1-day window made it tough; from a cost perspective, it was attainable, but it cost money to do it. At the end of the day, Walmart is not looking to drive costs up, they’re looking for performance and execution.”
A Solution for Struggling Suppliers
For suppliers still struggling with their supply chain logistics, Colby and the team at CaseStack offer sound solutions. Understanding what the supplier community faces each week, Colby shows how CaseStack steps in to achieve the goal.
“The two biggest factors for a supplier being able to achieve OTIF are capacity and cost. They really go hand in hand. The solution that CaseStack offers through consolidation is that we’re exceeding Walmart’s goal of 95% today.”
He concludes by explaining how CaseStack enables a supplier to exceed Walmart’s expectation on hitting goals. A simple partnership can save the supplier time, money, and the risk of future penalties.
“We’re taking at bunch of LTL (Less Than Truckload) suppliers and consolidating them to create full trucks. We’re eliminating a lot of the process,” Colby concludes. “LTL in general, just the way they operate, creates supply chain challenges to meet Walmart’s goal. We can offer an LTL supplier a 95% OTIF today because we’re moving in a full truckload environment. The systems, technology, and processes that we have in place can guarantee that an appointment will be made and that the product will be delivered within that window at a high service level.”
(To hear our entire interview with Colby Beland, click here for the Conference Call podcast.)