Walmart Tightens Squeeze on its Suppliers

Aiming to further streamline supply chain efficiencies as marketplace competition heats up, Wal-Mart Stores Inc. is rolling out a new program focused on adding $1 billion in revenue by improving product availability at stores.

The initiative, dubbed “On-Time, In-Full,” builds on progress the Bentonville, Ark.-based mega-retailer has made in reducing inventory and clutter at its 4,700 U.S. stores, Bloomberg reported.

Taking effect in August, the new rules will require full-truckload suppliers of fast-turning items, such as groceries and paper goods,  to make in-full deliveries on the required date 75 percent of the time, Bloomberg said. For items that are late or missing during a one-month period, suppliers will be fined 3 percent of the items’ value; suppliers also can be fined for early shipments, which can create overstocks.

By February, Walmart wants these deliveries to be on time and in full at least 95 percent of the time, up from a previous target of 90 percent within a four-day window, Bloomberg reported.

Under previous CEO Mike Duke, staffing shortages led to empty shelves, driving shoppers to competing retailers. When Doug McMillon took the helm in 2014, one of his goals was to reduce those out of stocks.

Walmart has developed a scoring system to rate non-compliant deliveries and will fine suppliers only if they’re responsible.

 

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