Since 2001, Wal-Mart Stores has emphasized sustainability and has required an ever-growing commitment to it from its suppliers. How you package your product and how you move your product both play into sustainability.
If you can shrink the amount of shelf space your product needs because you’ve improved the packaging, the retailer can put more product on the shelf, and you can put more product on the truck.
If you can put more product into each truck, the benefits include fewer trucks on the road (and, in turn, safer highways), reduced carbon emissions and better costs — which ultimately play out as everyday low prices.
Sam’s Club is working to develop more sustainable practices in its supply chain, too, making an understanding of sustainability even more critical for suppliers. One aspect of sustainability Wal-Mart has emphasized is third-party freight consolidation (3PC) which thousands of suppliers are already using. Consolidation is simply pooling multiple LTL (less-than-truckload merchandise) shipments onto a single full truckload delivering into the Wal-Mart distribution network.
Wal-Mart has recently held two summits on consolidation, how it works, how suppliers can benefit and how to transition. It’s important to Wal-Mart. Very important.
In addition to the summits, at the year-beginning meeting this year, Wal-Mart announced it was going to change its MABD (must-arrive-by-date) windows. Dry grocery, consumables and perishables will go from a four-day window to a one-day window, and general merchandise and softline products will go to a two-day window.
With the MABD window shrinking, there are only two ways for a supplier to be certain that he or she meets the new requirements: either pay for guaranteed LTL service to your carrier or look into the possibility of a third-party consolidator.
I have heard numerous people within the supplier community say Wal-Mart won’t be able to manage the reductions in MABD for the retail distribution center network. Only time will tell, but I would like to point out that Wal-Mart has already been managing their high velocity distribution network to a one-day MABD window since 2010, when supply chain reliability first rolled out.
I expect that February of next year is when these new, reduced two-day and one-day MABD windows will begin.
Some vendors want to take their chances about MABD and may even think this will not happen at all with Wal-Mart or Sam’s Club, but for those suppliers who want to be assured that they will be able to meet the new MABD, now is the time to learn more about these changes.
Wal-Mart’s fiscal year 2018 is right around the corner, and suppliers who research consolidation, decide it’s the best solution for their company and act now can have a very happy new year indeed.
Colby Beland is vice president of marketing at CaseStack in Fayetteville.