Are you aware of the Order-Timely In Full (OTIF) key performance indicator (KPI)? As an eCommerce business owner, it's essential to understand the value of OTIF and how this metric ultimately impacts your bottom line. The goal of on-time delivery is a core focus for today's businesses — big or small. To be competitive in today's market, knowing what OTIF KPI is and understanding its Importance is essential. Keep reading to learn about OTIF KPI, including what it measures and calculates and how it can help drive success in your eCommerce initiatives.
OTIF (On Time And In Full) is a service-level agreement between a supplier and buyer that guarantees the supplier will deliver all ordered goods, in full quantities, on the scheduled delivery dates set by the buyer.
The purpose of an OTIF agreement is to:
An OTIF contract requires accurate demand forecasting from the buyer and reliable order fulfillment planning from the supplier. Both parties share responsibility for meeting on time and in full metrics.
Achieving OTIF delivery performance provides many benefits:
OTIF measures two key metrics:
By making OTIF a key performance metric, companies can significantly improve customer satisfaction, supply chain efficiency, and their bottom line.
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OTIF stands for on-time and in-full. It is a metric tracking if all ordered goods are delivered in full quantities before the scheduled delivery date.
OTIF is crucial for customer satisfaction, preventing returns/refunds, supply chain efficiency, and managing costs.
OTIF measures on-time delivery date vs. scheduled date and number of units delivered vs. total units ordered.
Tips include understanding customer requirements, tracking all orders, partnering with a reliable 3PL, and finding process improvements.
Benefits include higher customer loyalty, increased sales, lower costs, better carrier rates, and improved team efficiency.
3PLs can provide warehouse and transport management services to improve order fulfillment accuracy and on-time shipping.
Consequences of poor OTIF include lower customer satisfaction, more returns/refunds, supply chain inefficiencies, and higher operational costs.
OTIF should be monitored daily or weekly to quickly catch any fulfillment issues and improve processes as needed.