Walmart is easing its requirements for suppliers’ on-time and in-full shipments, reports The Wall Street Journal.
The retailer now wants suppliers to deliver shipments on-time 90 percent of the time and in-full 95 percent of the time, down from a 98 percent designation for both measures set in 2020 during a time of spiking consumer demand during the pandemic, according to the report.
Vendors that continue to fail to meet Walmart’s logistics benchmarks will face fines worth three percent of the goods that did not arrive on time or in full.
The latest change comes as Walmart returns to more normal ordering patterns after struggling with drastic changes in stocking levels during the pandemic, said the report. The supply chain equilibrium has also helped remove some of the pressure from suppliers.
“We feel good about our inventory position as we begin this year,” John Furner, chief executive of Walmart U.S., said on an earnings call Tuesday. “Store managers and associates have back rooms that are quite under control.”
Research corroborates a shift towards a new “normal”: supply chain visibility firm FourKites found that, in 2023, CPG vendors delivered an average of 84 percent of orders on time, up from an average on-time order delivery rate of 77 percent in 2020, according to joint research from the Food Marketing Institute and Boston Consulting Group.
The report noted that industry experts agree Walmart’s lowered thresholds should be welcome news to vendors that have struggled to meet the original 98 percent benchmarks. Full Story (Subscription Required)