As reported by FreightWaves’ Mark Solomon, Walmart will require its suppliers and their carriers to deliver all orders on-time and in-full (OTIF) 98% of the time or risk being fined 3% of the cost of the goods being delivered starting September 15, 2020. Officially announced on September 1, 2020, Walmart gave suppliers just two weeks' notice of the updated penalties, and ultimately, the need to implement the technology necessary to meet these demands. These new OTIF requirements arrive just as suppliers prepare for an unprecedented holiday shopping season, where COVID-19 will continue to influence consumer buying habits.
It’s not surprising that Walmart is turning to aggressive OTIF mandates, as the enterprise giant continues to go head-to-head with its number one competitor - Amazon. We can expect other large retail organizations to follow, as they risk the loss of revenue when shelves are not sufficiently stocked or the inability to have sufficient resources at DC’s to handle unloading and storage due to supplier delays.
To keep pace with these demands and to avoid future penalties, suppliers must be able to address their lack of visibility and digitization needed to keep deliveries on schedule. This includes a call for the following:
- Visibility into the shipment, its parts, and a constantly updated ETA
- A control tower that determines the timing of packages and if they need to be rerouted to meet deadlines
- An international transportation management solution (TMS) that enacts these reroutes automatically and gives a supplier the control to establish a new plan of delivery.
While a supplier by default might make a shipment via train, insights generated via a control tower may identify a trucking route that is two times faster. It can also provide the costs associated with this change so that a supplier can determine what would make most sense for its own business - pay this delivery fee or the penalty from Walmart’s OTIF requirements.
Once a decision is made, utilizing a TMS will help carry out the proper directives. To take full advantage of automated capabilities, suppliers must begin with a digital operating platform where they have complete access to network data in one place so they can witness updates in real-time, make recommendations, and enact these recommendations when necessary.
Without enhanced technology, suppliers remain limited by manual work and the risk that updates will be missed due to the volume of orders and shipments processed on a daily/weekly/monthly basis. They also leave themselves open to penalties and lost business. To improve operations, increase visibility, mitigate customer concerns, and improve the overall customer experience companies need to upgrade from legacy approaches.
Blume Global enables you to meet OTIF commitments and exceed your customer’s expectations. Visit our website today to learn how the Blume Control Tower provides recommendations to get your order back on track.
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