Walmart is reducing its requirements that suppliers’ shipments to them arrive on-time in-full. Since September of 2020, 98% has been Walmart’s OTIF requirement. Beginning on February 1st, the new OTIF targets became 90% for on-time and 95% for in-full. This was announced on the Retail Link portal for suppliers on January 30th.
Russell Zuppo, a vice president for consulting services at Uber Freight, reports that in their customer base, Walmart suppliers are currently paying 0.16% of the cost of goods sold in fines to Walmart. Uber Freight is a major provider of managed transportation services.
Many consumer goods suppliers have implemented real-time transportation visibility solutions. These solutions allow companies to prove that their goods arrived on-time. But Stephen Dyke, a senior executive at FourKites, says that gaining visibility to whether a shipment arrives on-time is not the tricky part. Proving that it arrived in-full is. FourKites is one of the largest providers of real-time transportation visibility solutions.
It is not enough to use GPS to track a truck. The visibility solution must be built in such a way that it can download order quantity and inventory data from a customer’s systems. Uber Freight is also able to track both on-time and in-full. Steve Barber, the senior vice president of platform at Uber Freight, explains how this is done.
“And so, we can compare what was actually put on that truck versus what was planned to go on that truck at the order level,” Mr. Barber explained. “We can track that information down to the actual delivery level, so once it delivers, we can see whether it delivered on-time.” In addition to normalizing data and data cleansing, this is a Big Data problem. It is clearly not an easy problem to solve.
Having good OTIF data can help prove that a company really has shipped on-time and in-full. But what if the shipments don’t achieve OTIF? At FourKites’ user conference, consumer goods executives talk about how they have used the visibility data to determine where shipments are being held up across their supply chain, dug into the root causes of the delays or short shipments, and implemented continuous improvement programs.
But even solving the in-full data problem doesn’t totally exempt consumer goods companies from OTIF fines. A retailer might report that goods arrived damaged, that some cartons arrived empty, or goods might be stolen on route. Nevertheless, achieving better OTIF compliance is a major reason that consumer goods companies work with both FourKites and Uber Freight.
The post Walmart Lowers their Shipping Requirements, but their Suppliers Still Struggle appeared first on Logistics Viewpoints.