How Walmart Suppliers Overcame The Challenge Of OTIF

Suppliers have the option of less-than-truckload (LTL) or full truckload provided by Titan Transline to deliver goods to retailers. However, Walmart announced that it wanted on-time in-full program (OTIF), a logistics compliance program to move their targets from 70% OTIF to 98%. Suppliers were obviously surprised because there was little time to move the targets from 70% to 98%.

OTIF guidelines were pretty straightforward in requiring shipments to meet specific dates and delivery windows to retailers. Goods must be packaged and labelled properly and whatever has been ordered must arrive 100% full, not more or less. Arriving early won’t mean being on time.

Suppliers have no option but to follow Walmart’s guidelines otherwise they can be fined with 3% of the cost of goods or lose their business with Walmart. Suppliers that were most seriously affected were small manufacturers that usually ship less-than-truckload quantities. Besides that, the performance of LTL carriers is much lower than the full truckload carriers.

The mandate is fairly achievable because manufacturers can ship full truckloads to the warehouse of the consolidator instead of shipping less-than-truckload to the distribution centres of Walmart. Retail consolidation involves a consolidator that will receive orders from Walmart and other services. Orders from multiple suppliers will be aggregated into a single full truckload that goes to the same retail distribution centre.

An example is a food and beverage business that has been paying $300 to $400,000 in fines to Walmart and other retailers for late shipments. The business is no longer paying fines because of retail consolidation. Their inventory is reduced and allows them to do better in keeping inventory on their shelf. Transportation costs were also reduced because they have a logistic partner that can execute Walmart’s mandate.

If businesses are given the right tools and visibility to plan, they can use it forecast their production and shipments.

Meanwhile, Titan Transline offers both less-than-truckload and full truckload to their customers based on their requirements. Whatever transportation option is chosen, there is a guarantee that goods will arrive at their highest quality on time, every time. Other services offered include expedited delivery and appropriate transport for oversized goods and sensitive products.

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