Fresh produce shippers are used to dealing with unique retailer demands getting their product to market. One such challenge, first introduced by Walmart U.S. in 2017, is the retail giant’s on-time in-full (OTIF) policy. As the name indicates, this logistics compliance program requires product to arrive at Walmart’s distribution centers on time and in full. Shipments that arrive early, late, short, or not otherwise as specified in the Purchase Order, are all subject to fines.
While OTIF has been in place for several years, Walmart recently modified its targets, making compliance even more difficult, if not downright impossible. In effect since September 15, 2020, shippers that fall below the newly raised 98% on-time in-full target are subject to an automatic 3% total cost of goods fine. Put simply, 98% of all supplier deliveries must arrive on their Must Arrive By Date and must contain 98% of the cartons ordered, or penalties will be enforced.
One of the key concerns is that if a shipper scores less than 98% OTIF on orders during a given period, Walmart will take deductions on all orders during that period, potentially affecting a shipper’s entire program. This can be problematic since, according to a McKinsey & Company report, nine out of ten “late” shipments are set to fail even before the load is picked up.
If you are a Western Growers regular member that does business with Walmart, we’d like to hear from you. Western Growers is committed to supporting our membership and requests any additional OTIF feedback be sent directly to Bryan Nickerson in the Trade Practices Department at email@example.com or 949- 885-2392. All information will be kept confidentially.
Additionally, follow www.wga.com to learn about an upcoming OTIF Education & Best Practices webinar which will be held in June 2021.
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