There are three main metrics that Walmart actively uses to measure shipping success for suppliers and their carriers:
- Freight Factor
- SQEP
- OTIF
Freight Factor
Freight Factor (FF) is the amount charged by Walmart to transport the inbound freight. The top influencers to Freight Factor are Distance, Utilization, and Mode:
- Distance: How far are we shipping the merchandise?
- Utilization: How full is the trailer? How large a shipment is it?
- Mode: Method of transportation (TL, LTL, Rail, etc.)
SQEP
This stands for the Supplier Quality Excellence Program (SQEP) is a newer initiative of Walmart’s to improve supplier compliance. See our eBook, SQEP Handbook, for a more complete description of the program. Also, see this playlist or articles about the most common SQEP defects that affect suppliers’ bottom line.
OTIF
OTIF stands for On-Time and In-Full, and it is an earlier compliance program that Walmart developed to improve supplier freight compliance. Its goal is for all suppliers to achieve a 98% goal for all shipments, meaning 98% of all shipments will be on time (to the MABD) and in full (to the PO).
See our handbook, the Ultimate Guide to OTIF, for more information on the program and what it means for suppliers.