Date: 15 September 2020
According to a memo obtained by Talk Business & Politics, Scott McCall, Chief Merchandising Officer for Walmart U.S., and Greg Smith, Executive Vice President of Supply Chain Logistics and Transportation at Walmart, outlined how the new program will work.
Essentially, suppliers will be required through SQEP to meet Walmart’s supply chain standards. Suppliers will be charged when products shipped through the supply chain do not meet the standards to offset any costs generated because of non-compliance.
“Our goal is to improve the quality of deliveries in our supply chain by receiving all of the product we ordered at the time suppliers agreed to deliver it. No charges for SQEP will be implemented until after February 1,” Walmart said with regards to the new On-Time In-Full (OTIF) policy.
The SQEP will be implemented in the following four phases.
“As we continue to keep the customer at the center of everything we do, we must improve product availability to help ensure that our customer can purchase the products they want, when they want, in-store or online. To deliver on this goal, orders need to be fulfilled accurately, on time, and in full. Over the last couple of years, improvements to the On Time and In Full (OTIF) program have driven increased visibility and accountability for Walmart and our Supplier partners,” the memo uploaded to Walmart’s supplier portal said, according to Talk Business & Politics.
Walmart corporate spokeswomen Robyn Babbitt commented: “The customer is at the center of everything we do and one of the best ways we can help them save time and money is by having the products they want, when they want them, both online and in stores. We appreciate our suppliers and the work they are doing to help improve availability by ensuring all the products we’ve ordered accurately arrive on time for the customer.”
Meanwhile, Kevin Williamson, CEO of Chicago-based RJW Logistics, said: “We have seen e-commerce blow up in recent months and retailers are having to hold more items in their inventory and fulfill in more ways. Walmart talked about the need for a fluid supply chain a year and a half ago and the pandemic has created demand pressures no one could have predicted. Walmart has to serve its customers and they do by having products on the shelf, ultimately suppliers need to realize they share the same customers who must be served.”
Walmart has raised its OTIF guidelines over the past three years, and by Sept 15 the new requirement is 98% for all suppliers. Companies that do not comply will be charged 3% of the cost of goods.