Walmart OTIF vs. MABD: What’s the Difference?

For suppliers working with Walmart, adhering to their performance standards must be a top priority. Walmart’s on-time-in-full (OTIF) and must-arrive-by-date (MABD) requirements help maintain an efficient supply chain and minimize disruptions in the availability of products. Maintaining a successful partnership with Walmart requires a deep understanding of these metrics. Let’s explore the differences between MABD and OTIF and discuss how to navigate these compliance metrics.

MABD: Must-Arrive-By-Date

The must-arrive-by-date (MABD) was the sole cornerstone of Walmart’s logistics strategy for many years. Put simply, MABD is the specific date by which a supplier’s shipment must arrive at a Walmart distribution center. This metric guarantees that products are delivered on time to meet inventory needs without creating delays or excess stock. In the past, Walmart would choose a delivery date for the goods being delivered based on what type of product they were.

This doesn’t mean that MABD scores are now irrelevant. Over time, Walmart began to tighten supplier accountability and folded MABD into their OTIF initiative (which we will discuss later). As a part of that initiative, MABD scores are still important, but they are no longer the most important delivery metric.

Defining the MABD Window

Historically, the Walmart MABD window was a three-day grace period for perishable goods and four days for everything else, such as general merchandise or non-perishable food. Deliveries outside of this window are typically deemed non-compliant, which leads to chargebacks. Suppliers that complete shipments during the MABD window receive high MABD scores but receive lower scores for delivering too early, too late, incompletely, or inaccurately. 

The historical standard was that if less than 90% of the expected merchandise was delivered during this window, the supplier would pay a chargeback of 3% of the cost of the goods. As we will see, the MABD window and the requirement for in-full deliveries have been tightened under the OTIF program.

Adhering to the MABD window requires precise planning and communication across the supply chain. Suppliers must account for potential delays such as weather disruptions, carrier issues, or warehouse constraints to get their products delivered promptly.

OTIF: On-Time-In-Full

On-time-in-full (OTIF) was launched in 2017, in part to help Walmart respond to increasing competition with Amazon. Its purpose is the same as MABD: streamline the supply chain to keep products on the shelves. OTIF measures whether shipments arrive on the specified date (on time) and whether they contain the correct quantity and items (in full).

OTIF is a more comprehensive metric than MABD and more heavily emphasizes the “in-full” portion of the name, which speaks to Walmart’s emphasis on supply chain efficiency and reliability.

Walmart’s OTIF requirements apply to all suppliers and encompass both perishable and non-perishable goods. Instead of delivering a minimum of 90% of the quantities ordered, OTIF now expects suppliers to deliver 95% of each order on the must-arrive-by date a certain percentage of the time.

However, Walmart does acknowledge that extenuating circumstances can impact OTIF; for example, during the 2020 pandemic, they waived penalties for non-compliance.

Exploring Walmart’s OTIF Guidelines

As of March 2024, Walmart requires the following OTIF compliance from its suppliers:

• Prepaid suppliers must deliver orders 95% in full and on the must-arrive-by date 90% of the time.

• Collect suppliers must deliver orders 95% in full and on the must-arrive-by date 98% of the time.

• Non-compliance with either type of shipment will result in fines and chargebacks.

Walmart frequently updates its OTIF guidelines to adapt to changing market conditions and customer demands. Suppliers must stay informed about these changes to stay in compliance. Factors that influence OTIF performance include accurate demand forecasting, efficient transportation and logistics management, and proactive communication with Walmart’s supply chain teams. 

Fines are levied based on whether the error was an on-time or an in-full error on the purchase order. For example, if a shipment arrives a week late (on-time error), the supplier will be fined 3% for the cost of the goods in the shipment. If the shipment arrives on time but is short several cases (in-full error), the supplier will be fined 3% of the cost of the missing cases. If a supplier has both errors, they will be charged 3% for each one.

The Difference Between MABD and OTIF

The main difference between MABD and OTIF is the tightening of delivery windows. 

Both MABD and OTIF share the goal of optimizing Walmart’s supply chain, but they differ in scope and focus:

• MABD is a date-specific metric that focuses on whether shipments arrive within the assigned delivery window. It does not account for shipment accuracy or completeness. It is a metric nested in OTIF.

• OTIF is a broader “parent” metric that evaluates both timeliness and accuracy. It measures whether shipments 1) meet delivery deadlines and 2) contain the correct quantities and SKUs. 

Suppliers who work with Walmart must maintain OTIF compliance to avoid negatively impacting their scorecard and to remain in the program. 

Choose a Freight Broker That Meets Walmart’s Requirements

Navigating Walmart’s stringent compliance metrics requires expertise and reliability. Partnering with an experienced freight broker like Mulder Brothers can greatly improve your MABD and OTIF performance.

At Mulder Brothers, we specialize in Walmart shipments and understand the complexities of its compliance guidelines. Our services include:

• Route optimization to guarantee on-time delivery
• Real-time tracking to monitor shipment progress
• Proactive communication to address potential delays
• A dedicated support team that is available when you need them

We help suppliers meet Walmart’s exacting standards. With decades of experience in freight brokerage, we’re equipped to handle the challenges of MABD and OTIF compliance. Our team works closely with you from consolidation to delivery to make sure your shipments arrive both on time and in full so your supply chain keeps running smoothly.

Ready to optimize your Walmart shipments? Contact us today for a quote and start achieving MABD and OTIF excellence.