Walmart said this week that it’s planning on easing its requirements for in-full and on-time shipments from suppliers. According to The Wall Street Journal, Walmart said that it wants its suppliers to deliver shipments on-time 90 percent of the time and in-full 95 percent of the time, down from the 98 percent threshold the company set for both measures in 2020. Vendors that fall short of the newly established benchmarks will face fines worth 3 percent of the cost of goods that failed to arrive on-time or in-full.
Total Retail’s Take: With the supply chain disruptions seen at the height of the pandemic largely a thing of the past (thankfully), retailers find themselves in better inventory positions. Therefore, they have been able to pull back on stringent requirements for their product suppliers. Walmart is one such example, with its U.S. CEO John Furner telling investors that its “store managers and associates have back rooms that are quite under control.” Yet retailers must not get complacent when it comes to their relationships with current and future product suppliers. Expecting a high level of on-time and in-full shipments is the reasonable path forward and retailers are tasked with holding their suppliers accountable.
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