Over the past decade, supply chains around the world have gotten significantly more efficient. Driving this trend have been a range of technological and logistical factors.
We’re shipping more goods in greater volumes than ever before, and with the help of unprecedented smart tools. These have made possible next-day and same-day delivery.
Perhaps the most significant factor in this improvement has been the ever-more-intelligent ways in which the performance is being measured. Among the most notable of these is OTIF, or ‘on time and in full’ delivery.
What is OTIF?
OTIF is an acronym created by Walmart in 2017. It was used to measure how effectively suppliers were able to live up their promises when it came to delivery. If a customer received what they’d asked for at the right time and at the right place, then the OTIF performance could be said to be high. This is a natural extension of the company’s customer-focussed ethos, which holds that a dissatisfied customer could bring down the entire company.
With all of this said, there’s no single technical definition when it comes to OTIF, as it’s not a standard metric employed consistent across the logistics industry.
How is OTIF calculated?
You can think of OTIF as two separate metrics rolled into one. There’s the ‘on time’ component, which measures exactly how close the shipper came to meeting the agreed-upon delivery slot. Note that this doesn’t necessarily mean that the delivery was late. In some cases, the
Then there’s the ‘in full’ component, which refers to the product itself. This latter metric tends to be driven by customer feedback and complaints.
Proven ways to improve OTIF
Naturally, measuring your performance is a necessary first step toward improving it. But what might you actually do to drive your OTIF performance in the right direction? There are a few simple steps to consider.
Above all else, you’ll want to account fr the requirements of your customers. Make sure that they’re measuring OTIF in the same way as you. Then make sure that your products are able to ready to leave when the transport arrives.
Finally, you’ll want to make sure that your business is able to communicate well within itself, and with other businesses too. This means that all of the various departments should be have a point of contact between one another, and that responsibility for effective communication should be clearly assigned.
