“Wal-Mart exec tells suppliers why OTIF was needed, says bar is high but necessary”

Kath McLay2

Wal-Mart said without great product availability on its shelves, its promise of delivering low prices is empty. That is why the retail giant recently upped the ante on supply chain excellence and revamped delivery requirements known as On-Time-In-Full (OTIF).

Suppliers (full-truckload) who don’t comply with the new OTIF guidelines of 75% on-time and in-full deliveries are being fined 3% of the total invoice, according to rules put in place earlier this month. Kathryn McLay, senior vice president of logistics at Walmart U.S., said the retailer doesn’t want to be in the business of fining suppliers, but it’s necessary that everyone, including Wal-Mart, do a better job with the flow of goods from the manufacturer to the shelf.

 McLay was the speaker at the WalSreet Breakfast in Bentonville on Wednesday (Aug. 30), a Greater Bentonville Chamber of Commerce event held at Sam’s Club home office. McLay said in looking at Wal-Mart’s inventory flow two years ago it became clear improvements were needed to reduce the variability at its more than 100 distribution centers with billions of case of goods.