Welcome back to Lentz & Company's Tip Tuesday, where we give you tips to grow your business with Walmart, Sam's Club, and Ecommerce channels!
This week's tip: OTIF Compliance and why it's important to be compliant when doing business with Walmart and Sam's Club.
What is OTIF?
OTIF = On time, in full
The purpose of OTIF is to ensure that Walmart gets what they order when they need it so that product is available on-shelf for the customer. Minimum objectives have been calculated and set for each 6-digit vendor number. These objectives can be viewed in the OTIF scorecard.
Why does your business need to be OTIF Compliant?
If a supplier does not meet OTIF objectives they will be charged 3% of the COGS on all non-compliant cases that fall under the supplier’s accountability.
Suppliers will not be charged for cases that fall under Walmart accountability. Charges will be assessed monthly and charges will be sent per the schedule below. Charges will be deducted from the next open invoice monthly for any charges incurred in the previous month.
How do I avoid charges??
- Fill orders in FULL
- Ensure the Walmart forecast and supplier internal forecast are aligned
- Confirm product allocation to Walmart – will you be able to fill all orders?
- Evaluate your lead time
- Are there any additional process days that needed to be added in?
- Is there sufficient transit time?
- Ensure your ship points understand the requirements of OTIF
- Are they scheduling pickups early enough to give ample transit time?
- Do they make delivery appointments as soon as possible to ensure an appointment on the correct day?
Want to learn more about OTIF Compliance?
Our Supply Chain Experts at Lentz & Company have 40+ years of experience in doing business with Walmart and Sam's Club. If you're worried that you're not OTIF compliant and you're doing business with Walmart or Sam's Club, talk to us today to let us address these issues and take it off your plate!
Phone: (479) 899-6545