The supply chain tips that made Moose Toys a “Walmart Supplier of the Year”

Alloy:
Can you help us understand the kind of supply chain expertise your team has that really comes in handy when working with Walmart?

Joe Botts:
The key is that there is a lot of flexibility within Walmart’s supply chain. There are a lot of different levers you can pull. Even when you’re looking at doing port splits and shipping product, there are other ways you can ship into the Walmart supply chain that sometimes their own teams aren’t aware of. Like we don’t have to ship to all six IDC ports, we could ship to just two and still be able to do what we need to do.

It comes back to that attention to detail, to working through a problem or trying to find a solution to a potential challenge. You put everything on the table and then try to understand the five or six different things you can do in each situation. Whereas I think a lot of suppliers get trapped into the idea that if they can’t hit the ship date, they can’t hit the ship date. But there are a lot of other options beyond that.

If you talk to our buyers, they’d probably tell you, we don’t bring a lot of problems to the buyers as much as we say, “here’s the problem, but here’s a solution.” And I think they appreciate that when they can get that.

For example, we sometimes execute features that are pretty complicated and complex called DI conversion features, where we ship Walmart FOB orders to one specific IDC. We have a corrugate company pick up the goods at their IDC, pack out the corrugate feature and ship it to WMT stores. In order to execute a feature in this way, we sometimes have to write dummy POs which adds some complexity within their system, but they trust us to do it. I don’t think they would trust every supplier to pull that off because it is special. You need to have expertise in order to be able massage it through their system. We’ve gained their trust so we’re able to do those things. I think that’s not necessarily true for every supplier.

Alloy:
What are the key success metrics you look at with your Walmart buyers?

JB:
It’s pretty simple: It’s in-stocks, it’s POS forecast, it’s velocity, it’s seasonality. It really is those key four things that we’re constantly monitoring. And we’re predominantly an FOB business. So as an example of that, we’re working through spring 22 flow plans currently. That’s a very big piece of our business as well, ensuring that we get those right, that we get the timing of the goods arrival right. That’s something that we probably spend a little more time on than other suppliers that are domestic.

Because we’re predominantly FOB, if we don’t get the flow plans right, we don’t have as many levers to pull and say, “Oh, well, hey, we’ll just ship you more product.” It’s more like, “well, we’ve got to wait for the next wave of product to land.” So it puts us in more of the extreme version of having to get velocity expectations right on the front side as best we can.

For the buyers, item in-stocks continue to be a major metric that they evaluate daily. It’s very important to keep your in-stocks healthy and make sure the velocity is hitting where you think it should be. In order to keep your in-stocks healthy, Walmart needs to have the correct POS forecast in their system. And if they don’t then can we do a push or do we need to SSO extra product to ensure that we get a good run rate on the sales to understand the real velocity?

Seasonality is a key component in the Toy industry. The seasonality is a moving target every year. It changes because holidays move, consumer behavior changes. You look at the last year and it completely changed as far as seasonality was concerned. Obviously buying online versus in store is a constantly moving target. So you take all of these inputs and you try and just whittle it down to the basic things: Are we hitting what we need to hit? And if we’re not, what do we need to do? Cut back? Add more? And then we’re just constantly engaged with Walmart to ensure we can execute against that.

Alloy:
I want to get your take on something: Some suppliers or salespeople might think that as long as Walmart is placing the order, being a good partner means that they must fulfill it. What is your response to that mindset?

JB:
Honestly, I get that. For some suppliers, that’s a commercial reality.They need that order and they do need to fulfill it and ship it. And it doesn’t matter to them if it’s going to be over shipped or under shipped. They just got to get it out the door, and I get that. I would say for us, our “secret sauce” is being pragmatic and realistic. That’s gotten us a lot further, trying to really manage the business in a way that we don’t over-ship. We don’t want to get in markdown situations because we strive for newness and innovation. And the only way you get to newness is when you get to a spring season, you’re able to ship in new spring product. When you get to a fall season, ship new fall product.

We don’t want to ship too much product that as that puts us in a potential spot to not be able to get to that newness in new seasons. We want to ensure Walmart always has the newest Moose product on shelves to be able to compete with Amazon and Target and other channels out there. We really are trying to actively manage and be proactive at all times and not just sit and ship and wait. For us, being proactive in our business has come with far more benefits over time as it has helped us to build a foundation of trust with the buyers and their teams. For example, we do cancel POs when sales reads don’t hit expectations. There’s probably not many Toy companies that actually do that. We don’t wait for Walmart to come say, “we want to cancel.” We’ll proactively say we need to cancel this. We don’t want to end with 60,000 units. We’d rather end with 10.

That’s probably one of the bigger reasons that they see us as such a valuable partner because we are proactive in those types of scenarios.

Alloy:
Is there any final advice that you would give to others who are just really focusing on developing that stronger relationship with Walmart that we haven’t already talked about?

JB:
I have two things.The first, tying back to what I just said, be proactive as often as possible. That’s just not reality for some companies. I get it. We’re not a public company; we’re a private company, family owned. It gives us a little more leeway, a little more flexibility. But I think being as proactive as you possibly can goes a long way with Walmart.

And then the other one is to aim for clear and digestible communication. If you look at the last year, I haven’t seen a Walmart buyer face to face in over 14 months. It’s all been done primarily through email.

So as a team, one of the things that we’ve adapted is our style of communication. We’re able to give them complex information in a digestible chunk, because that could very well get forwarded onto three other teams at Walmart. And you want it to be something that they’re able to take action on and understand. I always tell my team, we have to anticipate the audience further down the chain, as well.

We’re able to communicate some pretty complex supply-chain related things that we want to do. If it’s moving things from FOB to domestic, or partial, or date changes, etc. We’ve built up a pretty good way to communicate that. And we’re all using a similar style, so they see it consistently and they’ve gotten used to how we’re going to communicate. That goes a long way to being able to help them, help us — so to speak.

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