In a change as sudden as it is sweeping, Walmart announced that suppliers across all categories must begin meeting its 98% on-time and in-full (OTIF) shipment requirement by September 15. Any suppliers who fail to deliver on the new guideline will be fined 3% of the cost of goods. The current completion rate among suppliers is just 70%.
Companies expressed their shock on a social media site dedicated to Walmart suppliers. Smaller suppliers in particular say they will be hard-pressed to meet the new guidelines, especially with so little time to adjust.
Walmart stressed both in the memo announcing the change and in a statement that its customers are its priority, and that OTIF requirements help shoppers save time and money. The retailer emphasized the positive changes in its supply chain brought about by its OTIF program.
“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..."