Wal-Mart has announced a new program named ‘On-Time, In Full’, which will see suppliers penalised if they deliver goods early, late or without the full shipment.
Suppliers will receive a fine should their goods arrive late or early, or if the shipment is not complete. The program is said to help the company improve product availability in stores and is a way to challenge Amazon, which has recently acquired powerhouse Whole Foods.
The move comes as Wal-Mart also raises wages, cuts prices and reduces inventory. Suppliers will have to adhere to the new rules as of August, and will need them to “deliver what we ordered 100 percent in full, on the must-arrive-by date 75 percent of the time.”
Speaking to Bloomberg, Laura Kennedy, an analyst at Kantar Retail, said, “Wal-Mart has to find efficiencies wherever it can. They’re trying to squeeze and squeeze and squeeze.’’
As part of the scheme, Wal-Mart has developed a scoring system for non-compliant deliveries, meaning suppliers will only be fined if it’s their fault. There is, however, no dispute policy.