In this article, learn about:
What DSDC is
How DSDC works
The benefits of using DSDC
How to convert to DSDC
Shipping goods to hundreds of Walmart stores can be costly, complicated, and full of potential errors. That's where Direct Store Delivery Consolidation (DSDC) comes in—it simplifies the process by allowing suppliers to send consolidated shipments to a regional distribution center instead of individual stores.
What is Direct Store Delivery Consolidation (DSDC)?
At Walmart, Direct Store Delivery Consolidation (DSDC) is a shipping method offered to streamline store deliveries. Instead of sending multiple shipments directly to individual stores, suppliers send consolidated shipments to a Regional Distribution Center (RDC). Walmart then handles the final delivery leg to stores.
DSDC is all about less-than-case orders, which means a shorter supply plan timeframe, leading to fewer out-of-stocks at the store. It also means that suppliers can package loose items into one container for more compact transport.
By consolidating shipments into a single delivery stream, suppliers can reduce costs, improve efficiency, and minimize delays at the store level.
The Benefits of DSDC
There are many great benefits to having a DSDC system in place. Switching to DSDC may come with major advantages for suppliers, including:
Lower Freight Costs: Consolidated shipping reduces transportation expenses.
Reduced Labor Costs: Store teams spend less time receiving and handling goods.
Improved Inventory Accuracy: Fewer discrepancies mean better data and fewer stockouts.
Fewer missing goods: Clearer processes reduce errors and losses.
More Accurate Budgeting: Reliable shipping and receiving data support better financial planning.
Ultimately, DSDC benefits both suppliers and Walmart by improving efficiency and customer satisfaction.
How Does DSDC Work?
The DSDC process begins with a purchase order (PO):
Walmart generates a PO either automatically or manually.
The PO is sent to the supplier electronically through EDI (Electronic Data Interchange).
The supplier packs items into store-specific cartons, labeling each with detailed shipping information.
Pallets are sorted by distribution location, shrink-wrapped, and staged for shipment.
Before shipping, the supplier sends an Advance Shipping Notice (ASN) (EDI 856) to Walmart.
Walmart accepts or rejects the ASN.
If Walmart accepts the ASN, then the supplier can send and invoice the shipment.
If Walmart rejects it, then the supplier must correct the ASN before shipping can take place.
An approved ASN must be in the system before the goods arrive at the RDC.
Once the goods arrive at the distribution center:
Walmart scans, sorts, and loads cartons onto outbound trailers headed to stores.
At the store, associates unload the trailers, confirm inventory, and stock shelves.
Related Reading: What is an ASN? Understanding Walmart's Updated Validation Process
Walmart’s DSDC Shipping Standards
Before shipping through Walmart’s DSDC network, there are a few key requirements to meet. First, a supplier must be approved from a Walmart Buyer, Replenishment Manager, and/or the DSDC Program Manager to be considered for conversion. Once approved, suppliers must follow specific shipping standards that go beyond general merchandise guidelines.
Walmart’s Secondary Packaging Supply Chain Standards provides detailed information on all of the DSDC requirements suppliers can expect to be held to.
EDI Requirements
EDI transactions are a key part of the DSDC process. Here’s a list of the EDI transactions a supplier must support in order to facilitate the DSDC process:
EDI 850 (Purchase Order): The EDI 850 will have everything a paper purchase order has, such as items, quantity, price, and shipping address.
EDI 856 (Advanced Shipping Notice or ASN): The EDI 856 alerts Walmart of a pending shipment.
EDI 824 (Application Advice): The EDI 824 transmits error messages. Walmart sends 824s when the retailer rejects an ASN. The supplier must correct the form before it can ship the order.
EDI 997 (Functional Acknowledgment): Walmart sends an EDI 997 when it receives an ASN or as a rejection if something is wrong. The EDI 997 will have the details of the errors so the supplier can correct them.
EDI 810 (Invoice): The EDI 810 requests payment of an order after the supplier ships the order.
EDI 864 (Text Message): The EDI 864 is a form of communication between the supplier and the DC when an error on the invoice has occurred.
Related Reading: EDI 800 Transaction Codes
ASN Validation Requirements
Walmart uses the EDI 824 (Application Advice) and EDI 997 (Functional Acknowledgment) to notify suppliers of errors with their ASNs. These could include issues like structural problems with the file, invalid item numbers or GTINs, or even overages. Suppliers should check for these messages daily and respond to any ASN errors within two hours of receiving a notice.
To update an ASN (EDI 856), at Walmart, resend the entire transmission, not just a partial correction.
Other important things to note:
Invoices must be consolidated at the PO/item level, not the store level.
ASNs must include the contents of each individual case.
Item quantities should be listed in single selling units and warehouse pack multiples.
Replenishment Requirements
Type 0073 Purchase Orders (POs) are used for DSDC.
Break packs are not allowed—the warehouse pack must match the vendor pack exactly.
Walmart does not allow backorders or item substitutions.
If a PO or any of its lines needs to be canceled, the supplier should make sure it’s canceled in both their internal system and Walmart’s system.
If any changes are made to a PO, the ASN must reflect those changes. If a change comes through after the order ships, notify the Walmart Buyer to update the PO so it matches what was actually shipped.
Once a DSDC PO has been sent to the supplier, it should not be edited in Walmart’s system.
Custom Packed Cases Requirements
For custom packed cases, all inner packs must feature an exposed, scannable UPC barcode that does not require the pack to be opened. Barcodes should be in a format that can pass through point-of-sale systems—such as UPC-A, UPC-E, EAN-13, or EAN-8. ITF-14 barcodes alone are not acceptable for inner packs.
Warehouse packs must be secure enough to prevent separation of items during shipping or handling. These packs must remain intact throughout transit. Single selling units cannot be split across multiple cases—doing so may result in the split items being rejected and a claim filed against the supplier’s invoice.
For traceability and accuracy:
Each shipping container must include items for only one store and one purchase order.
An approved SSCC-18/128 label must be applied to each shipping container.
The SSCC-18/128 number generation process must prevent reuse of the same “license plate” number for at least two years.
All containers must meet Walmart’s standards for automation eligibility.
Multiple POs in One Container
At times, Walmart allows suppliers with merchandise across multiple departments to consolidate purchase orders (POs) into a single shipping container. However, this requires prior approval from the Buyer, EDI team, and DSDC Program Manager.
To maintain order accuracy and streamline receiving:
Containers must be organized by store number, with only one store’s orders per container.
Each shipping container must be labeled with an approved SSCC-18/128 label that clearly identifies all POs contained within.
A single ASN must be transmitted for all POs packed in the container. If an error occurs that requires retransmitting the ASN, all included POs must be retransmitted, not just the one in error.
For suppliers not on a regular weekly replenishment schedule, Walmart requires a test shipment to be sent at least one week before the first scheduled shipment to ensure accuracy and prevent issues.
Related Reading: What Is Walmart's National PO Program?
Shipping Labels Specifications
Walmart requires DSDC shipments to be palletized and stretch-wrapped, with one bill of lading (per distribution center) that clearly identifies all of the PO numbers and cases. Packing lists are not necessary.
Each label must contain the following information:
Ship From
Supplier Name
Address
City, State, Zip Code
Ship To
Walmart Distribution Center #(xx) D-DSDC
Walmart Address
City, State, Zip Code
Ship For
5-digit Store Number
PO Number(s)
5-digit DC Facility/Location Number
4-digit Order Type
10-digit Department Number
DSDC Pick & Pack (SSCC-18)
20-digit Serial Shipping Container Barcode
Shortage Recovery Rate (SRR)
All Direct Store Delivery Consolidation (DSDC) suppliers are subject to routine audits on their deliveries to Walmart distribution centers. If discrepancies are identified during the audit process, a chargeback percentage will be applied. This Shortage Recovery Rate (SRR) is recalculated quarterly based on audit findings.
How to Convert to DSDC
Converting to DSDC involves two stages: consideration and implementation.
Stage 1: The Consideration Phase
Submit a request to convert to DSDC. The supplier should contact its Walmart buyer, replenishment manager, or the DSDC program manager.
Treat each vendor number separately, and request each vendor number to be a part of the DSDC system.
Appoint a point of contact to communicate with the DSDC program manager and learn what to do on the supplier’s end.
Fill out and submit the evaluation form to the DSDC program manager. Each vendor number requires its own form.
Complete a supply chain analysis to determine the impact of operating costs and the effect on the business processes after the DSDC conversion.
Distribute DSDC standards internally and externally to all impacted parties.The supplier should read the DSDC standards carefully and submit any questions it has to the DSDC program manager.
Attend a conference call with the DSDC program team to go over the questions, concerns, and requirements to ensure program compliance.
The Supply Optimization team and DSDC program manager will determine if the supplier is a good fit for DSDC.
Stage 2: The Implementation Phase
Once the approval for the conversion to DSDC has gone through, then the training can start.
Set a rollout date and create a phased DC rollout plan. The rollout typically goes a couple of weeks if converting from direct to store to DSDC. The DSDC team will also go over operational requirements in detail at this point.
Complete EDI training through the vendor self-testing portal at least one to two months before the rollout date.
The supplier will receive test orders and use the EDI system to process test orders to get used to sending ASNs electronically (the supplier may fill test orders to ensure there are no bugs in the system but will never ship test orders).
Achieve a 100% EDI testing pass rate.
The supplier will submit a sample shipping label to the DSDC program manager for approval.
Prepare for a “double order” buffer. This is when Walmart temporarily doubles store orders to prevent out-of-stocks.
The DSDC program team will audit the first shipment, so they can correct issues.
Review audit feedback with Walmart and correct any issues.
Switching to DSDC might seem like a big undertaking, but for many Walmart suppliers, the benefits far outweigh the setup effort. With the right preparation, communication, and attention to detail, DSDC can help suppliers cut costs, boost efficiency, and better serve Walmart stores and customers.
Stay Informed with SupplierWiki
As a supplier, staying up-to-date with the latest processes, guidelines, and best practices is crucial for maintaining compliance with Walmart. SupplierWiki is your go-to resource for all the information you need to navigate Walmart's requirements and stay informed about industry updates.
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