Earlier this year, Walmart announced changes to the On-Time In-Full (OTIF) program with goals of reducing lost sales and simplifying accountability for On-Time and In-Full performance. Now officially live in Q2, suppliers are held to separate goals for On-Time and In-Full eliminating the single OTIF minimum objective.
The original OTIF program, launched in 2017, is evolving as the retailer looks to increase in-stock levels with less inventory. Walmart is pushing suppliers that ship full trucks of products to deliver orders within a specified two-day window 87% of the time. Suppliers that fill part of a truck with their goods must hit a 70% on-time threshold – the most significant jump from the previous goal of 50%. The new expectations are not a surprise for many suppliers, but this transition can be difficult for those who have not invested in technologies or processes. According to Walmart, many suppliers are already achieving the new goals for in-full performance, however, under the new rules, suppliers face a 3% fine of the cost of goods sold for each case that fails to meet the requirements.
Walmart expects their vendors to deliver their orders On-Time and In-Full to ensure products are in the right place, in the right quantities, and at the right time. If a shopper walks into a Walmart store and the product isn’t on the shelf, they’ll look somewhere else and it’s primarily online. This isn’t just a potential loss of one sale, but of an entire customer.
The Simpactful team has decades of experience delivering mastery in supply chain consulting at retailers and suppliers. If your company has questions and challenges around Walmart’s new OTIF goals, we can guide you through and help you implement the best practices being used to exceed OTIF targets to minimize the risk to your business. Exceeding On-Time and In-Full targets will maximize your sales and will secure your place with the best supply chain companies in the industry.
To find out more, visit www.Simpactful.com or contact us at contact@Simpactful.com or 925-234-6394
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