Retailers always want to have the right product at the right place, at the right time, and at the right cost. Target is no exception to this. Their goal is always to have the items their shoppers want when they want them.
When purchase orders from Target to vendors aren't shipped as planned, whether related to timing or fill-rate, sales are missed, guest frustration increases, and rework might need to happen at Target, the vendor, and the carrier. All of this leads to increased costs and complexity in the supply chain. Those are the two things that you want to keep as low as possible within a supply chain so that products are as cheap as possible for you and me to buy at a store.
To try and incentivize vendors to be on time and in full, retailers like Target often implement a punitive fine program, Target's Compliance program or Perfect Order Program (sometimes referred to as OTFR for On Time Fill Rate, or OTIF at other retailers). They state their goal isn't to create more fines but to recognize zero charges and 100% compliance on the timing and fill rate of orders. In 2025, Target is expanding their Perfect Order Program beyond timing and fill rate to include metrics to help ensure proper receiving of orders at Target facilities.
Updates for May 4, 2025
Target has announced new compliance fines that will begin being assessed the first week of May. This includes all orders that are received by Target the first week of May, even if the order was placed and/or shipped prior to May 4th.
To help suppliers prepare for these new compliance metrics and fines, Target is providing visibility into how suppliers would be performing if the fines were live today, with no fines being deducted yet, in the Supplier Performance Management Dashboard (SPMD) application in PartnersOnline (POL).
The May 4th updates include:
ASN Availability will be measured the same as it is today, with the fine changing from a set 3% COGS received without ASN to $0.75 per carton received without an ASN
*New* ASN Shipment & Item Accuracy will assess the accuracy of the ASN data, with a fine of $0.75 per carton received with accuracy errors. The metric consist of 2 checks:
Shipment Accuracy - the Bill of Lading number must appear in the correct format and EDI segment
Item Accuracy - item data transmitted in the ASN must be accurate and match the purchase order
*New* Physical Barcode Accuracy assesses if items arriving to Target DCs can be scanned upon receipt to enable accurate receiving, with a fine of $0.75 per carton that has a missing or unscalable barcode.
Note: There are no changes in Domestic Quality Requirements for vendors shipping to Target's food distribution centers.
Recommended actions:
Review the new metrics in the SPMD to understand how you will perform under the new fines. Look into missed compliance instances now to implement corrections before the fines become active May 4, 2025.
Compare your ASN and Target item data in Item Management to ensure key details like casepack, store ship pack, barcode are aligned.
Target's Current Compliance Goals
Target goals that suppliers are responsible for are assessed on each purchase order and are as follows:
Fill Rate Original:
95% of original PO item quantities are delivered
Measured at the Item Level
On Time Release:
For Collect (We Pay) on ShipIQ (SIQ): 100% of POs are released in SIQ within the given timeframe in SIQ
Supplier Performance Adherence:
For Collect (We Pay) on ShipIQ (SIQ): 100% of shipments are shipped on the Target assigned pickup date in SIQ
On Time:
Collect (We Pay) on Vendor Ready to Ship (VRS): 100% of goods for PO are picked up within the pickup date window
Prepaid (They Pay): 100% of goods for PO are received in the in-yard delivery window
EDI 856 Advanced Ship Notice (ASN) Availability:
100% of purchase orders with delivery appointments have an available, error-free ASN before the In-Yard date/time for the associated delivering trailer
Compliance Fines Summary
Compliance Type | Goal | Fine |
Fill Rate Original - Item Level | 95% | 3% GOGs of all items not received in full |
On Time | 100% | 3% COGs of all good received outside the window
Pre-Aug 4, 2024: 5% COGs of all goods received outside the window |
EDI 856 (ASN) Availability | 100% | 3% COGs of all goods received without an ASN |
On Time Release | 100% | 1.5% COGs not released within the ship window |
Supplier Pickup Adherence | 100% | 1.5% COGs not picked up within the assigned window |
Inactive Fines
Target updates their compliance program regularly, sometimes resulting in a fine no longer being active. These fines may appear on your historical Target data, but should not be charged on any new orders.
Fill Rate Revised, replaced August 4, 2024:
95% of all revised order units are delivered
Measured at the PO Level, against revised POs
Fine: 5% COGs of goods not received