The Four Phases of Walmart’s Supplier Quality Excellence Program

By Molly Goad

Walmart rolled out its Supplier Quality Excellence Program (SQEP) in February 2021 to evaluate, measure, and monitor suppliers’ inbound quality. The goal is to excel in the areas of customer satisfaction, accuracy and visibility, and first time quality. Reducing operational costs is another biggie.

SQEP measures excellence by the four rights, which are:

  • Right item: Did you ship the correct product? 
  • Right condition: Did the items arrive undamaged?
  • Right invoice: Do the details on the invoice match the details on the PO, ASN, packing labels, and any other documentation involved in the order?
  • Right time: Did the shipment arrive on time? 

Suppliers are required to strictly comply to Walmart EDI and SQEP standards to “ensure that all packaging can sustain the distribution environment from the manufacturer all the way to the store shelf.”

Of course, there are other Walmart requirements to consider as well, such as insurance and audits, certificates, and testing. Suppliers should also be familiar with Walmart’s expectations in these compliance areas.

In this post, I’m focusing on what the four different phases of SQEP mean for those doing business with the retail giant.

SQEP Phase 1: PO Accuracy/ASN

Figure 1 shows the list of Purchase Order defects and descriptions as laid out in Walmart’s Supply Chain Packaging Guide. This phase has been in effect since early 2021.

Source: Walmart Supply Chain Packaging Guide.

The fee is $200 for each PO defect and $1 for each case impacted. Example: An overage on two Walmart POs that affects 200 cases total would result in a $600 charge ($200 x 2 invoices) + (200 cases x $1) = $600. 

SQEP required the use of ASNs Feb. 1, 2021. Walmart’s packaging guide doesn’t list the fines for ASN issues, but suppliers can log into their SQEP portal to be on top of any fees that may be coming. 

SQEP Phase 2: Barcodes and Labeling

Like Phase 1, Phase 2 is up and running now, meaning suppliers must comply with the barcode and labeling standards described in Figure 2. Common issues include barcodes in the wrong format, barcodes that have an incorrect quantity, and labels missing critical information such as item descriptions, item numbers, and vendor stock numbers.

Source: Walmart Supply Chain Packaging Guide.

The guide doesn’t list the fee amount for each infraction, but suppliers should check their SQEP Portal to review compliance scores and view projected fines.

SQEP Phase 3: Pallet, Load, Packaging 

Packaging quality, pallet compliance, and load quality is the focus of the next phase (Figure 3). If your packaging is weak, or the glue/tape doesn’t stay secured, you are considered noncompliant. Pallets without shipping labels and pallets that are built too high or have overhang are other no-nos. Phase 3 went into effect Jan. 1, 2022. 

Source: Walmart Supply Chain Packaging Guide.

SQEP Phase 4: Scheduling and Transportation

At the time of this writing, Walmart hasn’t published defect details and descriptions on this phase of SQEP. The date for phase 4 is listed as “TBD.”

Compliance is Key

As a supplier, it’s your responsibility to learn and follow all of these requirements. But if that’s not something you have time for, BOLD VAN can help. We can make sure your Walmart EDI is set up to navigate all of the facets of this program. It’s a lot to learn and understand, but it doesn’t have to be overwhelming for your team.

Find out what we can do to assist — call 844-265-3777 or email info@boldvan.com. If you need to invest in an EDI solution, but aren’t sure where to begin, we offer a three-month trial. Additionally, we offer an EDI-compliant shipping module called DES.

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