Technological advancements in recent decades have transformed the supply chain. While at one time, customers were accustomed to waiting 6-8 weeks to receive purchases, they now expect prompt service delivery. Delivering on time and in-full (OTIF) is one key to customer satisfaction. It’s also an important metric for measuring your level of service.
If you want to improve your OTIF supply chain, track the following metrics and implement these strategies.
What Are On-Time In-Full Performance Metrics?
The OTIF supply chain is based on two key metrics — on time and in full.
- On-Time: When a delivery was made in comparison to its anticipated delivery time
- In-Full: What percentage of the original order was fulfilled
OTIF metrics offer a full picture of how well your company is meeting customer expectations. If customers usually receive their orders on time, but only part of the order is fulfilled, it could impact customer satisfaction. Conversely, if a customer receives their full order but it is late, it may impact their experience.
By improving both on time delivery and in full delivery metrics, you are fixing two large contributors to customer satisfaction. If you notice a high volume of late deliveries or customer reviews of delays in their shipments, it is likely a sign that you could improve your OTIF supply chain. To calculate your current rate, use this formula:
Total deliveries made on time and in full / Total deliveries made X 100
For example, if 702 of 850 orders were delivered on time and in full, your OTIF rate would be 82.6% (702/850 = 0.8258 x 100 = 82.58). A good OTIF rate varies based on industry standards. Check out what others are doing in your industry to determine the optimal OTIF rate for your company.
Strategies for Improving the Performance of OTIF Supply Chains
Use these strategies to analyze and enhance your supply chain to improve your OTIF deliveries. By doing so, you can better meet your industry standard and foster a trusting relationship with your clients.
1. Demand Forecasting and Inventory Management
Efficient supply chain management starts with having an accurate idea of your supply and demand. Being able to reasonably predict customer demand allows you to have inventory on hand to fill orders quickly without being stuck with a lot of backstock.
Using software or teaming with a logistics provider to assess historical data will give you an idea of your supply and demand. The right inventory management system will also alert you sooner when inventory levels are running low. This will allow you to keep a higher on time supply and reduce instances of late deliveries.
Pair your historical data with market trends and customer insights to better manage your inventory. Your supply chain manager can use this data to maintain inventory levels of all your products and services, helping you meet customer demand effectively more often.
2. Efficient Order Processing and Fulfillment
If your order processing and fulfillment system is disorganized, it will impact your ability to deliver high service levels to your customers. Evaluate your system to identify and fix weak spots within it. This process can also improve your supply chain performance and meet delivery requirements.
Look at each step of your delivery process from when an order is placed to when and how it is delivered. Then, find parts of the system that could work more efficiently. You may be able to use software to automate parts of your process, such as inventory management.
For example, if you implement an inventory management system that automatically reorders merchandise when inventory hits a certain level, you can improve your delivery rate. Because your warehouse manager does not have to log inventory and order it manually, you can be sure you always have what you need on hand.
3. Collaboration With Suppliers and Carriers
Some parts of the delivery process are out of your control. You might have an efficient inventory management system, but your logistics provider may have trouble with time performance. Before partnering with any provider, look for safeguards against poor performance.
Ask about carrier performance management systems and other technology that can improve the delivery experience. Many transportation companies use machine learning and other technology to optimize delivery routes. They may also use Internet of Things (IoT) sensors to offer a better sense of estimated arrival times.
By collaborating with forward-thinking suppliers and carriers, you can improve your time performance.
4. Data-Driven Decision Making With Real-Time Visibility
The right technology will give you the insights you need to boost your supply chain OTIF. You should be able to see the status and location of each shipment, allowing you to identify potential delays and accurately communicate this information to your customers. With real-time data, you can notify customers of potential shipping delays right away. You can also better set their delivery slot so they know when to expect their packages.
Technology also allows you to present accurate information to your customers. When your inventory management system matches the data used to run your eCommerce website, customers will know if something they want is out of stock before they buy it.
5. Continuous Monitoring and Performance Improvement
Like other aspects of your business, supply chain management is always evolving. Implementing strategies to improve your OTIF supply chain is not a one-time process. You need to keep measuring your key performance indicators and making improvements where needed.
You may notice that certain product lines increase in popularity at various times of the year, yet your standard inventory management system doesn't account for the heightened volume. Paying attention to supply chain metrics will allow you to make changes to your processes and improve your delivery window in the future.
Leverage Sugere’s Solutions for an Enhanced OTIF Supply Chain
Whether you're a small shop or a major retailer, technology is a critical component of the OTIF supply chain. Sugere offers the solutions you need for real-time, data-driven decision-making. Our cloud-based asset management tool allows full visibility into your supply chain. Use the data to refine your delivery processes and make them more efficient.
Give your customers top-tier service every time by using insights into your supply chain to improve your OTIF rate. Find out how.