Most businesses thrive on exceptional customer service. It’s important to know which key metrics to track to understand whether you’re meeting customers’ needs.
In the logistics industry, on-time in-full (OTIF) is a crucial metric that assesses your ability to meet customers’ needs and build trusting relationships. Learn how to keep track of your OTIF score and how you can use it to improve your supply chain operations for a competitive advantage.
What Is OTIF?
OTIF is a key performance indicator for your delivery process. It tells you the percentage of deliveries made on time and in full. A high OTIF percentage means you’re consistently delivering products, raw materials, and other items when customers need them. OTIF differs from on-time delivery (OTD) because it also considers whether or not the delivery was complete.
For example, if you’re ordering parts and raw materials from multiple countries, some pieces of your order may take longer to clear customs. You would receive these pieces at different times. Even though the order was delivered on time, the initial delivery was not in full.
A 100% OTIF score is difficult to achieve because supply chains are complex and unpredictable. However, knowing your OTIF score helps you benchmark yourself against your competitors and assess how well any changes to your supply chain operations are working.
How to Calculate Your OTIF
Start improving your OTIF by calculating your current percentage of on-time and in-full deliveries. First, identify your total number of orders. Next, calculate how many were delivered on time by comparing the actual delivery time to the scheduled delivery time.
Calculate how many of these on-time deliveries also contained everything included on the initial order form. Finally, divide that number by your total deliveries and multiply the result by 100.
For example, if you made 2,500 deliveries in a quarter and 1,975 were on time and in full, your OTIF percentage would be 79%:
(1,975 / 2,500 x 100)
In general, an OTIF score of 90% to 95% is considered good, but each industry has its own standards. Check out your industry-specific publications, competitive analyses, and other resources to find the standard in your field.
What Are the Benefits of a High OTIF Percentage?
A high OTIF score showcases supply chain efficiency. When your OTIF percentage is high, it indicates that you consistently make in-full deliveries within the promised delivery window.
You benefit by keeping this number high in multiple ways, including:
- Enhanced customer satisfaction: Customers are usually happy when they receive what they ordered on time. A high OTIF rate shows that you can reliably deliver when a customer orders from you.
- Reduced costs: Consistently delivering orders on time and in full helps you optimize your inventory levels to avoid stock-outs or excessive holding costs. It also saves you from paying expedited shipping rates for a customer whose order was incomplete or refunding someone’s shipping costs for a late delivery.
- Improved supply chain efficiency: The tools you use to improve your OTIF performance can also help you plan and manage your supply chain more efficiently.
- Strengthened reputation: Happy customers who trust you to deliver on time and in full are more likely to recommend you to others. A high OTIF score helps you maintain your reputation as a reliable supplier, which drives more business to your company.
How to Improve Your OTIF Score: 5 Strategies
Omnichannel supply chains are ever-evolving. Logistics companies like yours are adapting to shifts in the workforce, new technologies such as AI, and a variety of changing economic conditions. These changes bring opportunities, but you need to be adaptable. A solid supply chain management strategy can help you achieve this agility and enhance your OTIF rate.
Real-Time Tracking
Technology improvements in logistics let you track your packages more closely than ever. IoT technology in the supply chain, such as RFID tags, gives you insights into your containers, from the ship to the shore and then to the distribution center.
This data helps you with route planning and other tasks by identifying bottlenecks in your existing delivery routes. It also allows you to reroute shipments that could be delayed by the weather or port closures. If your package is delayed, you can catch it in real time and notify your customers.
Maintaining Appropriate Inventory Levels
AI-powered inventory and demand forecasting tools give you accurate insights into customers’ preferences and market trends. Use these insights to plan out your optimal inventory levels. Set consistent reorder points and safety stock levels. An inventory management tool can alert you or even automate purchase orders when your stock falls below a certain level.
Choose a supply chain management tool with data visualization features that will help you identify seasonal shifts in sales and other factors to help you plan your inventory levels accordingly.
Continuous Monitoring and Performance Improvement
Using software to manage your supply chain helps you benchmark against yourself. RFID tags, barcodes, and other technologies automatically collect and transmit data to a centralized platform. Real-time transportation tracking lets you monitor each shipment to find the best routes.
Assess your OTIF performance regularly and use the insights from your supply chain management solutions to keep improving.
Data-Driven Decision-Making
Data analytics in supply chain management fuel decisions that impact your OTIF rate. Regularly track your shipment statuses, inventory levels, demand forecasts, and other metrics so more deliveries are completed on time and in full.
For example, monitoring your suppliers’ performance can help you identify whether any vendors are consistently impacting your OTIF rate. Use this data to negotiate better terms with these suppliers or find others who can deliver more reliably.
Efficient Order Processing and Fulfillment
Order processing and fulfillment software improves your warehouse management, minimizes your paperwork, and reduces human error. Your orders are processed correctly each time, reducing incorrect and incomplete orders. Look for a system that optimizes your workflows and makes the picking and packing process more effective.
Improve Your OTIF Score With Surgere’s Solutions
Surgere’s supply chain solutions increase your agility in the face of supply chain challenges. We offer real-time asset tracking solutions, transportation management systems, IoT tags that collect and transmit data, and integrated reporting driven by AI.
Take advantage of these solutions to evaluate your supply chain and make positive changes that improve your OTIF performance. Make your high OTIF score your competitive advantage to attract and retain more customers.
Contact us today to learn more.
