Walmart Supply Chain and 3PL’s: Friend or Foe?

Nov 29, 2021

March 2020 marked the beginning of what is arguably the most challenging period in supply chain history. The fallout from the ongoing pandemic exposed and accelerated industry vulnerabilities, and we continue to see global supply disruptions on an unprecedented scale, as well as the resulting inflation of freight costs and labor-market upheaval.

As we head into a new year and reflect on 2021, as well as 2020, we have to ask: what have we learned?

Your 3PL should be a strategic choice.

If your products flow through a 3PL that you can influence, you need to ensure you’ve selected a partner and not just a service provider. Throughout the pandemic, you’ve likely felt strain in areas such as inventory management, warehousing, and fulfillment, and as such, you need a partner who can step up to the challenge. You may have noticed: 

  • Increased communication. You are having zoom calls as needed, or at any time you feel that your 3PL needs some additional encouragement to increase their sense of urgency. You’re also talking to freight forwarders daily, tracking containers and ensuring your cargo is unloaded and moved forward.
  • Your 3PL is stretched so thin that you can see through them. And since they have a number of clients, they are prioritizing the ones who give the most effective and consistent encouragement, direction, and comprehensive communication.
  • All PO’s must be tracked from production, through transit, receipt at the retailer, shipping, and transit to stores, inventory reconciliation, and POS sales to ensure execution goals are achieved.

The bottom line is that you must be engaged with your 3PL at a much higher level than before. This will help to ensure your product has every chance to arrive in a timely manner and that your stock is held at an acceptable level. If not, you’ll likely struggle to succeed in today’s challenging supply chain environment.

Walmart will continue to adjust and increase performance expectations.

Walmart continues to expect higher performance, and they’ve made major changes to their shipping and receiving protocol, but what does this mean for brands in the retail ecosystem?

  • Fines caused by data and shipping errors are a daily and weekly touchpoint now. Avoiding fines during this trying supply chain tragedy is a process demanding dedication and consistency.
  • The Walmart Dynamic inventory flow now moves product to the DC that needs it most. As such, you may have found the new PO release to be inconsistent in timing, causing weeks of out of stocks in the shorted DC.
  • Walmart has greatly increased their use of rail within their collect freight system. Rail is also overloaded and moving slow, and you likely noticed that they now take up to two weeks longer than planned to deliver. 

Regardless, there is one common theme for both Walmart suppliers and 3PL’s: retail is still detail, and prioritizing a higher level of performance, dedication, and focus is a must. 

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