Walmart OTIF Fundamentals

Learn about:

How your OTIF Score is calculated
The main categories of OTIF
Key terms to understanding your On Time and In Full score

Walmart's On Time In Full (OTIF) program is a rigorous scoring system that tracks inbound performance by various levels of business. It assesses how well suppliers meet delivery expectations by ensuring that products arrive at the right time and in the correct quantities as agreed upon. Essentially, OTIF measures a supplier's ability to deliver what was promised, when it was promised, without any shortages or delays. Achieving high OTIF scores can lead to improved customer satisfaction by ensuring timely and complete deliveries.

How Is OTIF Calculated? What Is Included in My OTIF Score?

Walmart generally calculates OTIF by dividing the total number of vendor packs, or cases, that the Distribution Center (DC) receives within the delivery window by the total number of cases ordered. Walmart no longer grades suppliers on a single OTIF metric, though it is still tracked and available. Rather, suppliers must meet each OTIF-related metric to avoid fines.

Walmart does not consider overages in this calculation, so it only calculates shipments that are missing cases or haven't been filled at all. Additionally, Walmart does not include purchase orders for import merchandise, Sam's Club, e-commerce, and direct-to-store deliveries in its OTIF metrics or suppliers' scores.

What Is the Difference Between Prepaid and Collect?

There are two main ways that suppliers can transport their cargo. Prepaid and Collect outline who is responsible for overseeing freight transportation.

For prepaid orders, the supplier is responsible for shipping. This involves scheduling a carrier of their choice to pick up and deliver the order to a Walmart DC. Additionally, the supplier must create a delivery appointment at the Walmart DC to inform them of the shipment's arrival time.

Prepaid On-Time: The supplier provides the transportation

Walmart handles the pickup of collect orders. This means a Walmart truck or a third-party carrier dispatched by Walmart collects the product from the supplier's warehouse, and Walmart takes on the responsibility of transporting the product to the Walmart DC. The supplier is still responsible for scheduling a pickup appointment with Walmart, also known as a request for routing. The product must be packaged and ready at the supplier's facility for pickup; otherwise, this will impact the supplier's OTIF score. Ensuring the pickup appointment is scheduled and the product is ready is referred to as being Collect Ready. Collect orders are picked up by Walmart. This means a Walmart truck or third-party carrier dispatched by Walmart picks up the product at your warehouse and Walmart takes the responsibility of getting your product to the Walmart DC.

A flowchart titled "Collect Ready" outlines three steps in Walmart's transportation process. The first step states that Walmart provides the transportation. The second step indicates that orders must be confirmed by 4 PM CDT the day after the purchase order is sent. The final step specifies that orders must be ready for pick-up by the appointment time.

What Does It Mean to Be On Time?

A PO is considered On Time if the Arrival Compliance Date is within the delivery window. An Arrival Compliance Date falls under one of two scenarios:

If a delivery appointment is scheduled ahead of time, the product's arrival at the DC will be recorded with an Arrival Gate Timestamp, which will be considered the Arrival Compliance Date. This timestamp will determine whether the PO is "On Time."
If a delivery appointment is not scheduled ahead of time, Walmart will not document an Arrival Gate Timestamp. Instead, Walmart will consider the product delivered when they process the shipping documentation, which may occur days after the product actually arrives. The day Walmart processes the documentation is referred to as the Pro Date, which will be considered the Arrival Compliance Date and will determine whether the PO is "On Time."

What Does It Mean to Be In Full?

A PO is considered In Full if Walmart receives 100% of all ordered cases. If the amount of cases received is less than the number of cases ordered on the PO, then the PO is considered Not In Full.

The image displays a formula for calculating the "In-Full" percentage. It is written as: In-Full (%) = (# cases in full / # total cases ordered) × 100 This formula determines the percentage of cases delivered in full out of the total cases ordered.

Walmart no longer differentiates In Full metrics for different business units.

What Is MABD? What Is Order Quantity?

The MABD (Must Arrive By Date) is a key term related to OTIF that appears on POs.

The Original MABD is the Must Arrive By Date that is assigned to the PO when the order is created.
The Adjusted MABD is the Must Arrive By Date that is assigned to the PO when the order arrives at the DC.

The Order Quantity refers to the amount of product Walmart is requesting. This total ordered quantity is listed in the CTT segment on the EDI 850 Purchase Order.

The Original Order Quantity is the quantity of cases ordered on the PO when it was originally created.
The Adjusted Order Quantity is the quantity of cases ordered on the PO when the order arrives at the DC.

Essentially, the adjusted fields take into account changes made to the PO before it gets delivered, specifically changes to MABD and ordered cases on the PO, whereas original MABD and order quantity are based only on those values at the time the PO was created.

What Are Delivery Windows?

Delivery windows are the dates on which DCs must receive a shipment. Walmart bases its delivery windows on the Must Arrive By Date (MABD), transportation, and distribution center types.

Current 2024 Delivery Windows

Live Delivery Windows

For live appointment POs, the delivery windows are as follows:

Source: Retail Link > Academy > Analysis and Reporting > Walmart On Time In Full > Stores OTIF FAQ updated 5.2024

Drop Delivery Windows

For drop trailer POs, the delivery windows are as follows:

Source: Retail Link > Academy > Analysis and Reporting > Walmart On Time In Full > Stores OTIF FAQ updated 5.2024

What Is the Difference Between a System-Generated Order and a Manual Order?

A PO's event code is used to determine if the PO is system-generated or manually created. For grocery POs created with DCS2000, the Create User ID and Create System ID fields are used to classify the PO as manual or system-generated.

System-generated POs are measured against the original MABD and the original order quantity to determine whether the PO was on time and in full. POs with the event code of POS REPLEN, PICKNPACK, and 2-TIER are considered system generated orders. Canceled system generated POs will count against a supplier's OTIF score, with accountability assigned to them or Walmart, depending on the cancel reason code used for the cancellation.

Manually created POs are measured against the adjusted MABD and adjusted order quantity. POs with event codes that are not considered system-generated event codes (i.e., the ones listed above) are considered manually created POs. Canceled manually created POs do not count against a supplier's OTIF score. Managing both system generated and manual orders adds to the supply chain complexity, requiring careful coordination.

What Is Lead Time?

Lead time measures the time it takes for an order to be received, processed, fulfilled, and delivered to the DC. Lead time settings help determine the MABD on each PO. Lead time is calculated by combining four components: Supplier Process Time, Ship Interval, Transit Time, and Process Time at the Walmart DC. Accurately calculated lead times contribute to overall supply chain efficiency.

Supplier Process Time:

This begins when Walmart sends the PO via an EDI 850 Purchase Order. For Collect POs (where Walmart picks up the product), the supplier must complete a Request for Routing by 4:00 PM CST the day after the order is transmitted. Following this, the supplier prepares the shipment by producing, packaging, stacking, and wrapping the order.

Ship Interval (also called the "Pickup Window"):

This interval starts once the shipment is ready to be collected and ends when it is picked up from the supplier's facility.

Transit Time:

This begins when the shipment is picked up by the carrier (either the supplier's or Walmart's). Transit time varies for each supplier based on the geographic location of their ship points, department, PO type, and other factors.

Process Time at Walmart DC:

This starts when the shipment arrives at the DC and ends when the PO is marked as "received" by the DC.

Accurately calculated lead times are crucial for meeting the MABD. Suppliers should work with their replenishment teams to ensure lead times are accurate. Consistent, reliable, and efficient internal systems also help improve OTIF scores.