In logistics, “On-Time In Full (OTIF)” is an important measure used in logistics and supply chain management. It checks how well a supplier delivers products to customers on time and in the correct amount.
What is OTIF in logistics?
On-Time
This aspect of OTIF checks if deliveries arrive at the customer’s location at the scheduled time. Customers need deliveries on time to keep their operations running smoothly. Delays can happen due to traffic, bad weather, or other issues.
In Full
This part of the metric checks if the delivery includes the complete order as requested by the customer. Getting the right amount of products is crucial for customers to avoid shortages or excess inventory. Mistakes can happen, like picking the wrong items or not having enough stock.
Why is OTIF important in the logistics industry?
- Meeting delivery promises makes customers happy and builds trust.
- Tracking OTIF helps find and fix problems in the supply chain, making operations smoother.
- Accurate and timely deliveries help avoid extra costs from delays, missing items, and returns.
OTIF example scenario
Imagine you order 100 units of a product from a supplier, expecting delivery by July 20th.
- On-Time. If the delivery arrives exactly on July 20th, it meets the "on-time" requirement.
- In Full. If all 100 units are delivered, it meets the "in full" requirement.
If both these conditions are met, the delivery is considered OTIF.
How is OTIF calculated?
The OTIF percentage shows how often deliveries meet both the on-time and in-full criteria. It is calculated using this formula:
OTIF = (number of On-Time In Full deliveries)/total number of deliveries) x 100%
OTIF calculation example
Suppose a supplier made 100 deliveries in a month, and 90 of these were both on time and in full.
- Total deliveries. 100
- On-Time In Full deliveries. 90
Using the formula, the OTIF calculation would be:
OTIF = (90/100) x 100% = 90%
This means that 90% of the deliveries met the criteria of being on time and in full.
In summary, OTIF (On-Time In Full) is a measure that shows how well a company delivers products to customers on time and in the correct quantity.
