OTIF (On-Time In-Full) is a common metric that can be applied across the entire supply chain. It measures if an order was delivered within the expected time frame and if it included every item in the order.
While OTIF is often used to monitor delivery performance, it is sometimes used as a fulfillment metric to track how often orders are packaged and shipped properly.
Why is OTIF Used? When is it Important?
OTIF measures how a fulfillment provider performs—both the timing of their deliveries and the accuracy of their order.
If OTIF is low, there are a variety of things that may need attention.
- If orders are not delivered in full, then some part of the picking, packing, or labeling process isn’t working.
- If the order is not delivered on time, it is harder to decipher where the issue is; it may be either that there is an issue with when the order leaves the distribution facility or an issue within the shipping carrier’s performance.
OTIF is particularly helpful for retail fulfillment. Retailers are very specific about how and when they need to receive orders. Any issues result in fines or chargebacks, which can get very costly very quickly if they are applied per unit.
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Is OTIF the Same as On Time Performance?
OTIF is not to be confused with OTP (on-time performance). They are similar metrics but calculated and used very differently. OTP is also called on-time delivery (OTD) and signifies the number of times a delivery is made within the estimated or guaranteed delivery window. Sometimes a 3PL or logistics provider will track OTD or on time delivery. This is usually the same as OTP.
OTP is often used as a metric to measure shipping carrier performance. OTP is a building block to OTIF—if you can calculate the on-time delivery performance and the number of deliveries that were completed according to the order, then you have OTIF.
The opposite of a delivery made on-time, and in-full is a delivery exception. Missed, delayed, or undeliverable packages are compiled everyday by the carrier and sent to the shipper as a delivery exception report.
How to Calculate OTIF
It’s a very straightforward metric. Count the number of deliveries that were completed perfectly and on time. Divide that number by the total number of orders.
Deliveries completed on time and in full / Total deliveries made = OTIF Rate
As an example, if you have 1000 orders in July and 800 of them were delivered on time and in full, then your OTIF rate for July is 8/10. OTIF is usually tracked as a percentage, so that same rate would be cited as 80%.
How to Improve OTIF
As stated above, there are many reasons you might have a low OTIF rate.
The most common signifier of a low OTIF rate is customer complaints. If you are getting negative reviews or an increase of customer issues, you should do two things: comb through your fulfillment flow for gaps and inefficiencies; check with your carrier to see if they are meeting their delivery guarantees.
Here are a few detailed ways to improve your OTIF rate.
Increase order visibility—you need to have real-time updates on all order tracking to be sure everything is delivered on time and in-full. Check that your order management platform is the right one for your brand. It should give you stock levels, inbound shipping, sales volume, and returns, at the very least.
Improve inventory management—if you don’t have a great inventory management system, your inventory accuracy is probably low, which will lead to a low perfect order rate and low OTIF rate. The right tool will track and record stock, give you real-time visibility and help you more accurately forecast.
Update your WMS—a great warehouse management system is the backbone of your operations. Make sure you’re using a state-of-the-art system to appropriately manage all aspects of your warehouse or distribution center.
Check receiving data—if your products aren’t being received in a timely manner, then there is no way you’ll have a high OTIF rate. Receiving needs to be done efficiently to get your products in stock quickly, this includes inbound shipping, returns and refurbishment.
Automate everything you can—with automation comes greater accuracy. If you’re using branded boxes, for example, your fulfillment time may be taking longer than if you used standard packing materials that fit well with automated processes (like label machines,
Split warehouses for distributed inventory—if you can get products closer to customers, the “on time” aspect of OTIF will naturally improve. By placing inventory in multiple, strategically located warehouses, you’ll have a better chance of lowering shipping times (and costs!).
Switch carriers or shipping services—maybe your customers don’t need priority shipping. If you sell a product that doesn’t require a quick transit time, consider slower shipping options like Ground.
Why Tracking OTIF Matters
Obviously, every ecommerce brand wants products delivered to customers on time and in full. Customer satisfaction is so much of what any brand is focused on.
But OTIF affects much more than just end-consumers. It starts with your suppliers and manufacturers. Any products or raw materials that need to be shipped to your facilities (called procurement) need to be delivered on time and in full. Your OTIF rate starts there.
Any marketplaces, retailers, or non-B2C sales channels also need to receive your products in a timely and accurate manner. This step is vital for a positive relationship with your sales channels. Having a low OTIF with B2B shipping may cost you in fines or severing the relationship.
Finding a good fulfillment partner who can get your products out with accuracy and speed is important to maintain a good OTIF rate.
If you are in need of a fulfillment partner reach out to us for a quote. DCL Logistics works with many high-growth brands to scale without sacrificing flexibility, quality, or customer satisfaction.
