Every Walmart initiative supports one goal: Get the customers what they want, when they want it, and at an affordable price. In other words, improving the supply chain will not only keep items in stock but will also lower costs in the end. Walmart programs like On Time In Full (OTIF) work to improve the supply chain process and keep suppliers accountable for details like delivery times and complete orders.
When OTIF proved successful, Walmart began focusing on other details in the supply chain that contribute to a smoother delivery. Requirements like correct purchase order creation, packaging, labeling, and barcode specifications are essential to keep shipments from getting misrouted or stuck in a distribution center.
These accountability measures became known as the Supplier Quality Excellence Program (SQEP), which launched on February 1, 2021. Since this time, 8th & Walton has conducted Walmart SQEP seminars each month to discuss the basics of SQEP, Walmart’s goal, monetary penalties, and what suppliers can do to be successful.
What Is Walmart SQEP?
SQEP is Walmart’s Supplier Quality Excellence Program, designed to drive out unnecessary handling costs in the supply chain. The program focuses on quality of pallets, loads, purchase order accuracy, barcode placement, labeling requirements, and packaging guidelines.
Much like other Walmart programs before it, SQEP helps suppliers become better partners with Walmart. Goals are set and measured, and when suppliers fall short of the goals, there are monetary penalties.
The 4 Phases of Walmart’s SQEP
Walmart launched SQEP in four phases. At the time of this writing, three have been launched.
Phase 1: PO Accuracy and ASN Accountability
Suppliers who are not currently doing ASNs (Advance Ship Notices) should have a conversation with their EDI providers. This is to ensure they are ASN compliant.
In order to stay compliant with PO and ASN expectations, Walmart is specifically looking for:
- Item Setup Information – verifying item information is accurate and complete.
- Parent-Child UPC accuracy – ensuring a child UPC is linked to the parent UPC.
- Canceled Line adherence – suppliers can not ship against a line item after it has been canceled.
- Canceled PO adherence – suppliers can not ship against a purchase order after it has been canceled.
- Overage errors – POs shipped may not exceed the quantity ordered by Walmart.
- Allocation issues – issues involving a sort versus a non-sort or assigned to the wrong store.
- Wrong Pack quantity – the quantity specified on the purchase order does not match the quantity shipped to the Walmart store or distribution center.
- Item Not on PO – item(s) shipped to a Walmart store or distribution center does not match item(s) on the purchase order.
- Recall or Withdrawal shipments – items in the shipment have been recalled or withdrawn.
- Not Walmart Freight – the shipment received by Walmart was not freight intended to be delivered to Walmart.
- No ASN – an ASN label is not located on the case.
- ASN not Downloaded – an ASN was not sent or the ASN could not be downloaded.
- ASN Mismatch – purchase order line where an ASN is present, but ASN quantity and quantity received do not match.
- Imagery issues – for Walmart.com items, incomplete or inaccurate item descriptions.