WANT TO WORK WITH WALMART, AND ACTUALLY GET PAID?!

In a world where suppliers are trying to figure out how optimize brick and mortar retailers, getting an email like this can be a real set-back for the hardworking supplier teams that jump through hoops to "meet and exceed" big box retailer standards. No payment reviews for 6 months?! Cash flow/EBITDA/Profit Margins are verticals that EVERYONE is focused on. However for many retailers today, their operational requirements sometimes equate to jumping through hoops with a bathing suit, a pile of hot coals, while keeping a straight face. The logistical requirements alone, "One- day Must Arrive by Date Requirements", and zero tolerance for anything less than "On Time, In Full" otherwise resulting in a 3%-5% invoice deduction, put so many requirements on supplier teams, its impossible to achieve excellence unless there are 3rd party experts in the room as well. Otherwise the consequences are very real, like the above example- and in today's environment the sense of urgency is not a two way street anymore.

Third party support teams have had a cyclical interaction with retailers such as Walmart, Kroger, Target, Costco, etc., however getting a real world email, like the above, means that if a supplier doesn't get it "100% right" they don't get paid at all. So what used to be the same goals of driving sales, maintaining profit margins, and improving efficiencies for both the supplier and retailer, is in some cases a one sided equation where the supplier is supposed to execute flawlessly with a high sense of urgency......and the retailer who sells these products no longer operate with the same sense of urgency (CLEARLY a 6 month waiting period to review claims seems egregious in its own right....and of the 100,000 items on shelf at Walmart Supercenter, and a backlog like this, there are plenty of other suppliers with the same issue too).

However, third party teams, such as SIGHTLINE (www.sightlineretail.com) cost less, mitigate issues such as the above, operational experts in retailer specifics, and actually save the eco-system of brick and mortar retailers money in the interim. Just as a Kayak, Expedia, and Trivago save money and reduce hassles by aggregating points of knowledge, negotiations, and workstreams, at this point in the game of retail who can afford anything else except an expert? So if you're a supplier, thinking of doing business with Walmart, do yourself a favor and hire an expert. You can't afford to make a mistake, becuase the consequences are real.

Question for the audience, is the above a reasonable time frame to review disputes? If not, what should it be?

Matt Waller

William Dillard II Endowed Leadership Chair | Professor of Supply Chain Management | Board Membership | Private Equity

6 年

Thanks for sharing this well-written and insightful LinkedIn article.? Errors in the supply chain do not just affect a single node, but the entire supply chain.? Errors like this, as they multiply, create uncertainty, which leads to the needs for more safety stock, results in more out of stocks, more late deliveries, more risk aversion and hedging.? Errors --> Uncertainty ---> Increased Costs.

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