Walmart is switching up the rules it applies to suppliers for the fast-approaching year, tightening standards in multiple areas of its process. According to an article from commerce-focused news source Pymnts, the retailer will be shrinking its window for goods from four days to just two, while increasing it’s upping delivery compliance requirements in North America from 90 percent to 95 percent.
Expected to go into effect in February, 2017, Pymnts states, this increased pressure on suppliers has been something Walmart has been inching towards since it first announced its delivery compliance standards in 2010. The 2010 requirements state that items “must arrive by date” (MABD) for all merchandise from suppliers, who were then given a six month window to comply.
As of now, Walmart’s guidelines allow for delivery in a four day time period, either two days early or one day late from the MABD. As reported in the source, if a supplier misses that window 10 percent or more of the time, the company is then charged 3 percent of it’s quarterly invoice by Walmart. Those with very large contracts with the retailer could then potentially be taking a big financial hit.
Now, with the window shrinking to just two days and only wiggle room to miss the scheduled dates 5 percent of the time, the frequency of these fines will likely start to ramp up. Pymnts says deliveries will now only be permitted on the scheduled date or a day early—never late.
Will sourcing and logistics teams be able to tighten their workings to get suppliers’ shipments to Walmart in on time? Deli Market News will continue to follow the retailer’s changes to its supply chain.