On Time in Full (OTIF): Definition + How To Track & Measure

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.

• Complete understanding of On-Time In Full
• The key metrics that help you improve OTIF
• How monitoring OTIF benefits your business
• Best practices for improving OTIF and how Vector helps in this context

Understanding On-Time In Full (OTIF)

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.

What Is A Good OTIF Benchmark?

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.

9 Key Metrics That Help Track & Optimize On-Time In Full

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:

• On-Time Delivery: This is the bread and butter of supply chain metrics. It’s all about making sure your products hit the right destination at the right time. If you promise your customer a delivery date, you better stick to it. Late shipments can rattle trust and cost you more than just dollars – your reputation might take a hit too.
• In Full Delivery: On-time is great but if your customer opens the package and finds items missing, that’s a no-go. This metric ensures that not only do you deliver on time but you also deliver everything that was ordered.

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:

• Cycle Time: It measures the time it takes for an order to complete its full cycle – from order placement to delivery.
• Backorder Rate: The backorder rate measures the percentage of orders that can’t be fulfilled immediately because of stock shortages.
• Lead Time: It measures how long it takes for an order to move from the moment it’s placed to the moment it’s in the customer’s hands.
• Inventory Turnover: It is about how many times your stock is sold and replaced over a period. A high turnover means you’re keeping things fresh and efficient.
• Dock-to-Dock Time: It starts when the goods leave your supplier’s dock and ends when they arrive at your customer’s dock. The shorter the time, the smoother the process.
• Fill Rate: It’s the ratio of the total quantity of items ordered versus the total quantity of items delivered. A high fill rate means you’re acing the preparation game; a low one means you’re coming up short.
• Order Accuracy: Imagine your customer orders 5 red shirts and you send them 3 blue ones and a pair of socks. That’s not just a mistake, that’s a comedy of errors. Order accuracy means you’re delivering the right items in the right quantities, color, and size – whatever was ordered.

7 Proven Benefits Of Monitoring OTIF

The benefits of tracking OTIF go beyond accurate and on-time deliveries. Let’s discuss them in detail.

01

Enhanced Customer Satisfaction

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.

02

Improved Supply Chain Efficiency

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.

03

Reduced Inventory Costs

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.

04

Increased Operational Productivity

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.

05

Forecast Accuracy

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.

06

Minimized Production Delays

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.

07

Enhanced Overall Business Reputation

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.

7 Strategies For Improving OTIF: Master The Art

Learn these strategies to improve OTIF and unlock a secret formula for business success.

I.

Enhance Supply Chain Visibility

• Real-time Tracking: Implement advanced tracking technologies like GPS, RFID, and IoT to monitor shipments’ progress and location in real time.
• Predictive Analytics: Use historical and real-time data to forecast potential disruptions for proactive management and mitigation of delays.
• Exception Management: Set up automated alerts for deviations from the plan, so immediate actions can be taken to rectify issues and prevent further delays.
• Collaborative Platforms: Employ collaborative software that lets all stakeholders share information, updates, and alerts. This ensures everyone is on the same page.
• Data Integration: Integrate data from various sources, like suppliers, manufacturers, distributors, and retailers, into a centralized system for a holistic view of the supply chain.

02

Improve Demand Forecasting & Planning

• Data-driven Insights: Analyze historical sales data, market trends, and customer behavior to identify patterns and make accurate demand forecasts.
• Collaborative Forecasting: Involve key partners in the forecasting process to incorporate their insights and align production and distribution plans.
• Agile Planning: Implement agile methodologies for quick adjustments to production and distribution plans in response to sudden changes in demand or supply.
• Demand Sensing: Use real-time data feeds, like social media trends and point-of-sale data, to adjust forecasts based on changing customer preferences and market dynamics.
• Scenario Modeling: Develop multiple scenarios based on different demand projections and potential supply chain disruptions. This helps in better risk assessment and preparedness.

03

Cultivate Collaboration

• Shared KPIs: Establish shared KPIs with partners to ensure that everyone is working toward the same goal of improving OTIF.
• Customer Collaboration: Engage customers in the planning process to gather insights into their needs, preferences, and any potential changes that might impact demand.
• Joint Issue Resolution: When issues arise, work together with suppliers, manufacturers, and other partners to collectively identify solutions and minimize the impact on delivery schedules.
• Supplier Collaboration: Collaborate closely with suppliers and share demand forecasts and production plans to align their processes with your requirements and reduce the risk of shortages.
• Cross-functional Communication: Encourage open and regular communication between departments like production, procurement, logistics, and sales to ensure everyone understands their role in achieving OTIF targets.

04

Safety Stock & Buffer Management

• Demand Fluctuation Buffer: Maintain a buffer of extra inventory for unexpected spikes in demand, reducing the risk of stockouts.
• Dynamic Replenishment: Implement systems that automatically trigger replenishment orders when stock levels drop to a predefined threshold.
• Lead Time Variability: Consider lead time variability when calculating safety stock to allow for potential delays in receiving materials or products.
• Safety Stock Analysis: Determine the optimal level of safety stock based on historical demand variability, lead times, and supply chain uncertainties.
• Regular Review: Periodically review and adjust safety stock levels based on changing demand patterns, supplier performance, and other relevant factors.

05

Optimize Transportation & Logistics

• Mode Selection: Choose the most suitable transportation mode (e.g., road, rail, air, sea) based on factors like delivery urgency, cost, and distance.
• Load Consolidation: Combine smaller shipments into larger ones whenever possible to maximize load capacity and reduce transportation costs.
• Route Optimization: Use advanced routing software to plan the most efficient routes while considering factors like traffic, distance, and delivery time windows.
• Carrier Collaboration: Collaborate closely with transportation partners to communicate expectations, provide real-time updates, and address potential issues promptly.
• Use a Yard Management System: Implement a yard management system to efficiently manage trailer movements, loading/unloading, and optimize overall yard operations.

06

Streamline Order Management & Processing

• Order Prioritization: Establish clear criteria for prioritizing orders based on factors like delivery urgency, customer location, and product availability.
• Automated Order Processing: Use automation for order processing, from order entry to fulfillment, to minimize manual errors and accelerate order processing times.
• Real-time Inventory Visibility: Ensure real-time visibility into inventory levels across all locations to prevent overselling and manage customer expectations accurately.
• Order Confirmation and Updates: Provide customers with real-time order confirmation, status updates, and tracking information to manage expectations and reduce inquiries.
• Centralized Order System: Implement a centralized order management system that captures and tracks orders from multiple channels to reduce the risk of order errors and delays.

07

Adopt Continuous Process Improvement & Practices

• Regular Audits: Conduct regular process audits to identify bottlenecks, deviations, and areas for improvement, ensuring adherence to best practices.
• Benchmarking: Compare your performance against industry benchmarks and best-in-class companies to identify areas where you can further improve.
• Lean Principles: Embrace lean manufacturing principles to eliminate waste, reduce inefficiencies, and optimize processes across the supply chain.
• Employee Training: Provide training and development opportunities to enhance employees’ skills and ensure they are equipped to contribute to process improvements.
• Key Performance Indicators (KPIs): Define and regularly track relevant KPIs related to OTIF, such as order processing time, lead times, and on-time delivery performance.

Improving On-Time in Full Metrics With Vector’s YMS Integration

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.

01

Real-time Visibility & Tracking

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.

02

Optimized Dock Management

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.

03

Efficient Yard Operations

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.

04

Collaboration & Communication

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.

05

Performance Metrics & Continuous Improvement

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.

06

Automated Workflows & Alerts

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.

Conclusion

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.