The ABCs of Walmart's OTIF Initiative
Walmart's On-Time In-Full (OTIF) program is crucial to your supplier journey. It boils down to two main questions:
Did your shipment arrive on time? You'll receive a delivery window, and being early or late can cost you.
Was your shipment complete? What you deliver must match your purchase order (PO) to avoid penalties.
Calculating Your OTIF Score
Your OTIF score is calculated using two key metrics: on-time and in-full deliveries. Penalties are a percentage of your order value. Here's how it works:
If you deliver 90% of your 100-case order on time, with no discrepancies, your on-time score is 100%, in-full is 90%, and your penalty is $0.30.
But if all 100 cases arrive a day late, your on-time score is 0%, and the penalty jumps to $3.00.
Consistently delivering incomplete shipments late can lead to significant losses.
Aim for a 98% OTIF Score.
Walmart's goal for suppliers is a 98% OTIF score as of September 2020. If you fall short, your penalties rise. But, exceptions are made for uncontrollable disruptions like weather or major events.
Why OTIF Matters
The end goal is simple: have products in stock when customers want them. A smooth supply chain drives sales, profits, and positive customer experiences. Walmart wants suppliers to succeed, not pay penalties.
Walmart OTIF Guidelines
As of September 2020, all Walmart categories and delivery methods must meet the 98% OTIF expectation.
How to Improve OTIF Performance
Boost your OTIF score with these steps:
Know Your OTIF Scorecard: Monitor your performance with Walmart's OTIF Scorecard in Retail Link®.
Fix PO Issues First: Ensure your shipments match the PO and stay updated on changes.
Talk to Your Walmart Merchant: Align your production and shipments with your merchant's expectations.
Consider Third-Party Help: Small and mid-sized suppliers can benefit from third-party logistics firms to streamline their supply chains.
Stay Informed: Keep up with OTIF guideline changes through Retail Link® and regular communication with your Walmart merchant team.
In Conclusion
Mastering Walmart's OTIF program is critical to supplier success. Meeting the 98% benchmark ensures better in-stock availability, improved sales, and a prosperous partnership with Walmart.
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From national retailers like Walmart, Target, CVS, and online giant Amazon to regional retailers like Texas’ H-E-B, Woodridge is with you every step of the way.