The world’s largest retailer has high expectations for on-time delivery. As of Sept. 15, Walmart is requiring suppliers to achieve 98% on-time and in-full (OTIF) delivery. Noncompliance incurs a 3% fine. Previously, Walmart required 70% OTIF for less-than-truckload (LTL) carriers and 87% for truckload carriers.
Walmart is not alone. In response to consumers’ urgent demands for stocked shelves, several other retailers have similar requirements of suppliers and consumer packaged goods (CPG) companies.
“The need for precision supply chain management and transportation execution has never been greater,” said Tracy Rosser, executive vice president of operations at Transplace. “During the COVID-19 crisis and beyond, industry professionals are investing in digitalization. With more advanced data accuracy tools and processes, shippers and CPGs achieve a higher level of on-time performance by making more informed decisions in real time.”
Improving OTIF performance
Leading managed transportation and logistics services provider Transplace manages over 400,000 shipments into Walmart each year for iconic brands like Del Monte, Nestlé Waters, Kellogg’s, McCormick and Mars.
“Fines and fees are not new but will become more of a challenge,” said Meghan Charboneau, senior strategic sourcing manager at Mars, a world-leading manufacturer of confectionery, food and pet care products. “Shippers need to look at their supply chain more holistically from a total cost of ownership perspective, not as siloed on just carriers and rates. Transplace has the horsepower and they’re on the leading edge with data visibility and dashboards for identifying issues quickly.”
Transplace shares a local presence with both Walmart and Sam’s Club in Northwest Arkansas, giving the 3PL the advantage of collaborating closely with the retailers’ suppliers and analyzing the root causes when deliveries do not go as planned.
“We’ve built a centralized group focused solely on OTIF excellence,” said Mark McEntire, senior vice president of operations at Transplace. “Our team of retail experts have deep experience in the OTIF program and the appointment scheduling process. Based on our long-term relationships with CPGs, we can anticipate issues and offer solutions to avoid service issues. With our hyper-care, white-glove approach, we support shippers proactively with predictive analytics and consistent root cause analysis.”
3 tips for achieving OTIF excellence
Transplace logistics experts provide three tips for success in achieving OTIF excellence:
- Advanced transportation management system
Harness the power of a cloud-based transportation management system (TMS). With fluctuating capacity and more demanding delivery service times, accurate visibility is required to mitigate risks and maintain schedules.
Transplace’s TMS includes the Control Tower, offering complete visibility as well as risk prediction analytics. Shippers can track and trace in real time where their shipments are and optimize route plans. With automated delivery appointments and scheduling, Transplace clients gain greater control of the logistics process.
Transplace’s team consists of CPG and retail supply chain experts. They create proactive reports for loads scheduled to deliver late, as well as the Carrier Update Compliance report, which identifies leading indicators of service failures.
The comprehensive TMS spans the core functionality of planning, execution and settlement across all modes including truckload, LTL and parcel.
“For most of our CPG business, we receive and own orders all the way until the carrier is paid,” said McEntire. “Other logistics providers may have only a brokerage relationship with a shipper or only provide distribution for the shipper. Transplace owns the entire order to cash. Our full-service partnership equips our clients with vast data insights to identify opportunities and drive performance.”
- Industry-wide analytics and best practices
For the past three years, Transplace has sent a weekly OTIF benchmarking report for Walmart and is now working on a similar report for Sam’s Club. Even shippers that are not Transplace customers can access the report. All participants are anonymously compared to other shippers participating in the program. With extensive data from Transplace’s TMS, the benchmark report identifies trends and opens opportunities for shippers to share best practices.
Brian Suwalski, director of logistics at Mars Wrigley, acknowledged the weekly report as a vital connection point with quick insights to gain a broader perspective of business. By understanding how Mars deviates from industry standards, Transplace provides cost-effective solutions to refine procedures and behaviors. “We’ve seen major improvements in over-the-road,” said Suwalski.
Transplace uses a root cause analysis data tracking system to identify common points of failure. The system spots trends and takes corrective action. After reviewing lead time, live versus drop, asset versus broker, delivery appointment times and more, shippers are armed with significant data to make necessary improvements.
- Enhanced collaboration and trust
Consistent communications create a trusting partnership, heightening collaboration.
The Transplace team makes recommendations that improve shipper-carrier relationships. Leveraging its more than $11 billion of freight under management and TMS data allows Transplace to look for carriers that may be a better fit for a CPG’s specifications. Transplace Network Services (TNS) provides significant advancements in multi-shipper collaborations, improved capacity and cost management. Shippers can be matched to the carriers and routes that will best improve delivery times. In addition, TNS optimizes shipments while minimizing deadhead and wasted miles.
“Transplace has been looking at our low-performing lanes,” said Charboneau. “We have regular touch points with our general manager to decide if it makes sense to do a mini bid or reallocate volumes on different lanes to higher-performing carriers.”
Charboneau believes that without a high level of trust between shipper and logistics provider, improving lane performance is impossible.
Transplace’s commitment to hyper-care elevates collaboration, trust and continuous improvement for OTIF performance.
To learn more about Transplace’s OTIF excellence program and weekly supplier performance benchmarking report, reach out at transplace.com/contact/customer-shipper-carrrier-support/.
