In a bid to compete with Amazon, Walmart is telling suppliers they need to accelerate their shipments. Jennifer Smith and Sarah Nassauer report in The Wall Street Journal:
The retailer wants suppliers that ship full trucks of products to deliver orders within a specified two-day window 87% of the time, up from an 85% rate it targeted previously. Suppliers that fill part of a truck with their goods must hit a 70% on-time threshold, a significant jump from the previous target of 50%.
Walmart also is changing how it penalizes suppliers when they make partial deliveries, an effort to make sure products are on shelves when needed, a particular focus for Walmart as it ramps up online grocery pickup and delivery services that pull from store inventory to fulfill orders.
“When we receive the product that we ordered, we see better sales,” said Steve Bratspies, the chief merchandising officer for Walmart U.S. Suppliers of the retail giant previously were evaluated on how consistently orders arrived on time, combined with how complete their orders were. Now Walmart will evaluate suppliers on each part separately so the performance of each piece of delivery can be evaluated more easily, said Mr. Bratspies.
Walmart executives announced the changes, which are set to take effect by May, at an annual supplier conference last week.
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