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Walmart’s Supplier Quality Excellence Program (SQEP) is a four-phase initiative designed to improve accountability standards for its suppliers, ultimately enhancing the consumer experience. With the intent to establish end-to-end quality within its U.S. distribution network, SQEP outlines Walmart’s new standards for PO Accuracy, Barcode, Labeling, Packaging, and Load & Pallet Quality. If not approached accordingly, these compliance regulations can severely impact your bottom-line and reduce your presence at retail.

This program underscores the opportunity for suppliers to find a 3PL partner that can help them navigate and comply with every SQEP requirement. Let’s take a look at the value your 3PL should be providing.

Phase 1 Shipping Notifications

Phase 1: Accuracy & Advanced Ship Notification

Implemented on February 1, 2021, Phase 1 of Walmart’s SQEP is comprised of three ‘sub-phases’ that focus on PO Accuracy and ASN requirements.

Phase 1A: PO Accuracy Through the SQEP Dashboard, suppliers are able to monitor PO inaccuracies, supply chain errors, and more. Items received at a distribution center must match what is on the PO with 100% accuracy. Likewise, items shipped must match the item file labeled in the Item 360 program.

Phase 1B: Item Data Accuracy outlines the migration to Item 360, the platform suppliers are required to utilize for item setup and maintenance in-store and online. Suppliers are given the ability to edit orders, track submissions and resolve any issues that arise – all from the Item 360 portal. To reduce product returns and ensure compliance, your 3PL partner should support efficient product imaging for your item file and e-commerce listings.

Work with a 3PL to establish an Accuracy Action Plan that addresses the following areas:

  • Quality Assurance: Mitigate errors and avoid item substitutions that contribute to SKU inaccuracies.
  • Accountability: Ensure practices are in place to prevent inaccuracies while picking orders.
  • Item File Accuracy: Update Item File when changes are made to pack (warehouse and case pack) sizes to ensure file matches what is being shipped.

The right 3PL partner will help develop these processes alongside your team to ensure product SKUs match the Walmart POs and help maintain adequate inventory.

Phase 1C: Advanced Ship Notice (ASN) will be required for all Domestic Purchase Orders shipped to a Walmart U.S. Distribution and/or Fulfillment Center. ASNs provide visibility of the actual contents of a shipment, enabling automated purchase order maintenance, improved inventory allocation and trailer unloading – enabling increased in-stocks at retail.

Ensure your 3PL provider offers a comprehensive ASN program that helps you manage accuracy, completeness and timeliness of your products throughout the supply chain.

Phase 2: Barcode & Labeling

Phase 2 of Walmart’s Supplier Quality Excellence Program, expected to roll out at the end of September, covers the accuracy of shipping labels and requires suppliers to verify that case labels are scannable and accurate. Data collection will transition from VCOE to Fixit Inspections

The following provides a general guidance on how defects are calculated.

  • Barcode Compliance: Wrong format, incorrect quantity, incorrect barcode, or other barcode defects.
  • Label Compliance: Incorrect quantity, missing/incorrect description, item #, or vendor stock #.
  • Hazmat Compliance: Hazmat Label Missing/Covered.

While Walmart does not provide a specific label template or format, partner with a 3PL that provides an enhanced set of in-house services to cut overhead costs and reduce turnaround times.

Phase 3: Load Quality, Label Quality & Packaging

Expected to roll out in Q4, Phase 3 outlines the accuracy and quality of packaging, load and label quality.

The following provides a general guidance on how defects are calculated:

  • Packaging Compliance. Weak package/glue/tape, poor performance, missing tray/lid, loose wrap, undersized/oversized case, selling units not secured, or other packaging defects.
  • Pallet Labeling. Missing shipping label or other pallet labeling defects.
  • Pallet Securement. Poor securement, bagged item, missing tray, or other pallet securement defects.
  • Pallet Build. Pallet overhand, excessive height.
  • Pallet Quality. Non-compliant with Grade A standards, non-compliant size.
  • Load Stability. Shifted, unstable, non-palletized.
  • Load Segregation. Segregation by PO Type, PO, or Item.

The right 3PL partner will help you eliminate the need to outsource to vendors, reduce unnecessary supply chain waste, and ensure you optimize your resources – ultimately creating a more efficient supply chain.

Phase 4: Scheduling & Transportation

Information regarding Phase 4 has not yet been released by Walmart. However, it is critical to work with a 3PL provider that offers supply chain visibility, transportation flexibility and timely trucking capacity to ensure your goods arrive on time and in good condition.

Being proactive and complying to Walmart’s SQEP ensures shelves are fully stocked and accounted for – ultimately creating a more efficient supply chain and competitive business advantage. Partner with a 3PL that will help you adapt to every requirement throughout every phase.

Learn how RJW provides a full suite of in-house solutions to drive compliance with Walmart’s SQEP and OTIF requirements.

Learn how RJW provides a full suite of in-house solutions to drive compliance with Walmart’s SQEP and OTIF requirements.

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