Inconsistency and inaccuracy in order deliveries can be fatal to any company and achieving the delicate balance isn’t easy. It’s about doing it exactly when you promised you would. Welcome to the world of On-Time In Full – a metric that’s more than just numbers on a chart. It’s a reflection of your commitment to customer-centric excellence.
Order accuracy, and that too in a targeted delivery time, is everything to assess the success rate of any business. Customers expect nothing less and your ability to meet these expectations can make or break your success. OTIF serves as a yardstick that tells you where you stand in the customer favorability scale.
But it is all easier said than tone. To successfully track and measure this metric, you should have a full grasp of what it is about and how to optimize it in the best possible way. Hence the purpose of our article today.
Here is a breakdown of what you will get from this read.
On-Time in Full (OTIF) is an important metric used in supply chain efficiency to gauge how effectively products are delivered to their target destination. It measures your supply chain efficiency in terms of delivering the right quantity of products on time. The 2 key elements here are “on time” and “in full.”
“On Time” refers to the punctuality of your deliveries. It’s about ensuring that your products reach their destination exactly when they’re supposed to, without any delays.
“In Full” means the quantity of products being delivered. It’s all about sending the correct number of items as per the order, ensuring that nothing is missing or short.
It is relatively easy to calculate OTIF and has a simple formula that considers both timeliness and completeness. Here’s the formula:
OTIF (%) = (Number of Orders Delivered On Time and In Full / Total Number of Orders) × 100
A higher OTIF percentage indicates a more efficient supply chain performance where a larger proportion of orders were delivered as intended, both in terms of timing and quantity.
The commonly recognized benchmark for OTIF performance is between the range of 80-90%. This means that 80-90% of your orders should be delivered on time and in full.
However, remember that what’s considered a good OTIF benchmark can differ across industries and even among companies within the same industry. Some industries with more complex supply chains might have slightly lower benchmarks for this supply chain metric because of the nature of their operations.
Here are 9 key metrics of OTIF that help supply chains stay on track, measure their performance, and continuously improve. Out of these 9, the first 2 KPIs directly impact OTIF. These are:
The next 7 metrics have an indirect impact on OTIF and supply chain managers should monitor and work towards maintaining them at the highest level. Let’s take a look:
The benefits of tracking OTIF go beyond accurate and on-time deliveries. Let’s discuss them in detail.
When you keep a close eye on your OTIF performance, you ensure that your products are delivered to your customers exactly when they expect them, and in the exact condition they’re supposed to be in. This doesn’t just happen by chance. It’s a result of careful planning, efficient execution, and a direct focus on measuring supply chain performance.
Your customers rely on your products to meet their commitments and deadlines. If they can’t rely on your products arriving on time or if they’re missing components, it can throw a wrench into their plans. They might have to delay their projects, miss opportunities, or even look for alternative suppliers – none of which are ideal outcomes for you or them.
Monitoring OTIF means you’re proactively tackling supply chain complexity. You’re not just hoping things work out; you’re making sure they do. This reliability and consistency build trust. Your customers start to view you as a partner they can depend on, and that is the foundation of customer satisfaction.
OTIF lets you keep tabs on how well all the moving parts of your supply chain sync up. Are your suppliers delivering components on time? Is your manufacturing process running smoothly? Is transportation ensuring timely delivery? All these questions are answered when OTIF is calculated.
When you identify a link in the chain that’s consistently late or causing disruptions, you can address it. You can streamline supply chain operations, optimize routes, and even have candid conversations with suppliers who might be struggling to keep up.
This isn’t just about putting out fires; it’s about supply chain visibility, identifying patterns, and making long-term improvements. When you start improving these processes, your supply chain becomes leaner, meaner, and more efficient.
Let’s talk dollars and cents – specifically, the ones that could be saved by keeping a close eye on your OTIF performance. When you measure OTIF, you’re not just tracking successful deliveries. You’re also indirectly tracking the reliability of your suppliers. If your suppliers consistently struggle to meet the deadlines, it can cause stockouts or production delays on your end. What’s the usual solution? Stockpiling inventory – just in case.
On the other hand, when you focus on joint performance management and your suppliers are consistently delivering on time and in full, you can trim down that excess inventory. You are not hoarding safety stock because you are confident that what you need will arrive when you need it.
This way, you free up capital that would otherwise be tied up in excess stock. You cut down on storage costs and you even reduce the risk of obsolete inventory sitting around.
OTIF lets you evaluate the coordination of various stakeholders in your supply chain – suppliers, manufacturers, distributors, and more. Monitoring OTIF sets a benchmark for operational efficiency. It creates a sense of accountability among all parties involved. If a supplier’s ability to deliver on time is consistently underperforming, you can address the issue head-on.
This proactive approach to supply chain management can work wonders for productivity. Your teams can focus on value-added tasks rather than constantly firefighting. Your operations become leaner, your output becomes more consistent, and you can even consider exploring avenues for process improvement – all because you have a finger on the pulse of your OTIF performance.
When you diligently track and calculate OTIF, you get insights that can significantly improve your forecasting accuracy. As you improve OTIF, you reduce the uncertainty in your supply chain. The goods are delivered on confirmed delivery time which creates a more predictable flow. Result? Your forecasts become more grounded in reality.
With a clearer understanding of OTIF, you can make informed decisions about how much to order, when to order, and how to align your operations.
Imagine you are about to start a production run and you realize that one of your key suppliers is falling behind in meeting the OTIF targets. Instead of discovering this at the last minute, you are prepared. You can either work closely with that supplier to expedite the delivery or have contingency plans in place, like having backup suppliers ready to step in.
But it goes beyond just reacting to delays. Monitoring OTIF also encourages a proactive approach. As you continually track supplier performance, you can identify trends and patterns. If a particular supplier tends to struggle during certain seasons or under specific circumstances, you can plan and adjust your production schedule accordingly.
OTIF creates a ripple effect. Customers start to associate your brand with reliability and dependability. This reputation doesn’t just stay with your current customers; it spreads through word-of-mouth and positive reviews, attracting new business.
Your suppliers also take note of your commitment to OTIF. It communicates that you value their ability to meet commitments, strengthening your supplier relationships and enhancing your overall reputation within the industry.
Learn these strategies to improve OTIF and unlock a secret formula for business success.
Vector is our cutting-edge yard management system that is designed to enhance supply chain management. With it, your entire yard workflow streamlines. It directly targets and elevates your On-Time In Full metrics and ensures that the deliveries are not just on time, but also spot-on in their entirety.
Vector’s YMS integration gives you a real-time view of your entire yard operations. You can track shipments, vehicles, and assets as they move through your yard. This visibility results directly in improved OTIF as you can proactively identify bottlenecks, delays, or even potential issues before they snowball into problems that could affect your delivery schedules.
Our YMS keeps tabs on your loading and unloading processes. It helps streamline the allocation of docks so that the right shipments are matched with the right docks at the right time. This ensures smoother transitions, minimizing wait times, and avoiding the mad rush that often causes partial or delayed shipments.
Efficient yard operations play a pivotal role in meeting your OTIF goals. Vector’s YMS optimizes yard movement to prevent congestion and unnecessary shuffling of trailers. It strategically arranges the yard layout to minimize the distance trailers need to travel, cut down on handling time, and increase the chances of timely deliveries.
One of the biggest culprits behind OTIF misses is miscommunication. Vector’s YMS acts as a centralized hub for all stakeholders – from warehouse managers to truck drivers. Everyone’s on the same page on schedules, priorities, and any unexpected changes. Clear communication directly reduces confusion-induced delays, making those “in full” deliveries a more regular occurrence.
OTIF isn’t a one-and-done deal; it’s a continuous journey. Vector’s YMS provides valuable data that goes beyond just whether a delivery was on time. It gets into why it was, or wasn’t, on time. This level of insight lets you pinpoint root causes, refine processes, and incrementally improve your OTIF performance over time.
Vector’s YMS can trigger automated workflows based on predefined rules. If a shipment is lagging, the system can initiate alerts to relevant parties and prompt them to take action. This automation drastically reduces the manual effort required to monitor operations and ensures that potential OTIF hiccups are addressed promptly.
When we talk about supply chain excellence, being on point with operations and keeping things smooth is the whole game. There is no better way to achieve this excellence than to track and improve your On-Time In Full metrics.
One way to get a higher OTIF score is to reduce lead time and incorporate route planning and network configuration. This also includes inducing a seamless and flowy yard management system.
Elevating your supply chain to achieve higher OTIF metrics, Vector’s YMS is the ultimate solution to achieve unmatched operational efficiency. It guarantees a supply chain where every step is designed with precision, where delays are minimized, and where your entire operation flows seamlessly.
Interested to learn how? Book a demo with us today and revolutionize your yard management.
This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.
Digital workflows across the supply chain.
