(Editor’s note: Do you need help navigating Walmart’s OT&IF scorecard? Our team at 8th & Walton can take you through a step-by-step class. Or, if you need more help eliminating OT&IF fines, we can do the work for you!)
February brings two important events for Walmart suppliers:
- the beginning of Walmart’s fiscal year
- the annual Supplier Growth Forum (a.k.a. Walmart’s Supplier Summit)
One of the most anticipated agenda items at Walmart’s Supplier Growth Forum is any update to the On Time and In Full (OT&IF) initiative. It was just a year ago that the company separated On Time and In Full into two separate metrics. Both are subject to penalties on the scorecard.
Colby Beland, Vice President of Sales and Marketing for CaseStack, has been helping suppliers with OT&IF issues since it was first announced over three years ago. In our recent conversation, he provided insight on how suppliers were impacted by last year’s update and the biggest issue today.
The Challenge of Two Metrics
Walmart suppliers knew separating On Time and In Full into two measurable metrics would be a challenge. As Colby has worked with many suppliers over the last year, he explains the biggest challenge as it relates to a new trend in the retail industry.
“On Time and In Full is still a challenge for the small to mid-size suppliers,” he begins. “When you break it out, one thing that’s happening with retail in general is retailers are wanting to order smaller quantities more often. As they order smaller quantities more often, it equates to less than truckload (LTL) size orders.”
Less Than Truckload Means More In Costs
Small to medium-size Walmart suppliers usually don’t have their own logistics network and rely on third parties. The advantage of partnering with a consolidator like CaseStack is combining loads with other suppliers to create full truckloads. As Colby explains, retailers ordering fewer quantities more often is driving costs.
“LTL orders are very inefficient and very expensive (regardless of the size of the company) to ship as it relates to a cost per case price,” he concludes. “That’s the biggest challenge whether you’re a big company or a small company. It’s meeting the On Time service metric and not driving your costs up as retailers want to order smaller quantities more often.”
To learn more about CaseStack’s services for Walmart suppliers, click here to visit their website.