In an effort to cut down on costs, Walmart has announced that it will fine suppliers who deliver goods early, starting in August.
Early? Late? Missing? That Might Be A Fine
According to Bloomberg, the new program is called ‘On-Time, In-Full’ and it is designed to add to Walmart’s revenue by $1 billion by improving product availability while reducing inventory.
In August, Walmart will start to require shippers who provide full truckloads of fast turn goods like groceries to “deliver what we ordered 100 percent in full, on the must-arrive-by date 75 percent of the time.” Failure to comply with Walmart’s requirement on a month by month basis will result in a 3% fine on the value of the load. This means that late shipments will be fined, but so will early shipments.
Walmart’s goal is to have all of these types shipments “on-time, in-full” 95% of the time by February 2018.
‘On-Time, In-Full’ Scoring System Is Not Disputable
To accompany the aggressive new program, Walmart will create a scoring system that will identify the reason that a load is either early or late. If, according to the scoring system, Walmart is at fault for the non-timely delivery, the shipper won’t be charged. If Walmart deems that the shipper is at fault, there are no recourses. “Disputes [with the scoring system] will not be tolerated,” according to Walmart.
The current ‘On-Time, In-Full’ scores for Walmart’s current top suppliers are nowhere near the 95% goal. Some of Walmart’s top 75 suppliers have scores as low as 10%.
Bloomberg speculates that bad weather may not even be a sufficient excuse for missing an ‘On-Time, In-Full’ deadline.