Dive Brief:
- Walmart is enhancing its supply chain with a program that aims to simplify inbound supplier logistics in order to get products on shelves and to customers faster, per a news release Tuesday.
- The Prepaid Consolidation Program allows suppliers to send products under one national purchase order to a single location, rather than individual orders to multiple facilities. After that, Walmart combines the inventory and distributes it across 42 of the retailer's regional distribution centers, boosting transportation efficiency in the process.
- The program will scale in phases, with supplier participation prioritized based on volume alignment and capacity expansion, according to Walmart. Interested suppliers can contact Walmart or a participating provider to discuss eligibility.
Dive Insight:
For Walmart, the program looks to boost inventory replenishment precision, reduce variability and support better in-stock rates at stores, the release said.
“We’re focused on making our supply chain simpler, faster and more efficient for suppliers, while also keeping products in stock for our customers,” Mike Gray, senior vice president of Supply Chain at Walmart U.S., said in the release. “By strengthening our first-mile capabilities, we’re reducing complexity and keeping goods moving, so we can deliver even more value every day.”
Currently, Walmart suppliers can run into efficiency challenges, as they have to create individual purchase orders, pick multiple cases and load separate pallets for each shipment going to a Walmart regional distribution center, per a video accompanying the release. The consolidation program will allow suppliers to create one purchase order attached to a single pallet destined for one location. Walmart handles the rest, and can position inventory in the best location based on customer demand, according to the video.
Participation doesn't require suppliers to change their prepaid freight terms, according to Walmart. Suppliers pay a price-per-case rate that covers handling at an automated consolidation center and outbound transportation to regional distribution centers. They can manage their shipments directly through Walmart or approved third-party logistics providers like C.H. Robinson, Hub Group and RJW Logistics, per the announcement.
"Suppliers working with participating providers will access region-specific pricing through Walmart’s published rate card, with no additional markups applied by participating providers to services performed by Walmart," the announcement said.
The program is one of several supply chain-related upgrades Walmart has rolled out in recent years, ranging from inventory-tracking sensors to robotic installations at distribution centers. More improvements are in the pipeline as the company is ramping up supply chain spending and investing in increased automation within its operations.
