Retailers use a measurement standard called On Time In Full (OTIF) to measure how well suppliers deliver goods at the time and location and, in full quantities. They assess this regularly either monthly or quarterly allowing suppliers to enhance their performance based on results. These benchmarks are in place to prevent supply chain disruptions that impact the market.

When suppliers don’t meet the promised OTIF standards then retailers can actually fine them. This might the affect relationship between suppliers and retailers. However, when suppliers do as they promised, it will lead to cutting unwanted costs, customer satisfaction, and improvement in the overall flow of the supply chain.

Other Metrics

Sometimes, OTIF is also known as DIFOT (Delivery in Full on Time). On Time Delivery (OTD) is another metric that only measures the time in which the deliveries are completed, where as OTIF also considers the completeness aspect. Fill rate is another similar metric. It is the percentage of demand that has been met from the existing stock without loosing any sales or backorders.

Tips To Improve OTIF Scores

1. Aligning the timing of production with transportation

The manufacturer or production facility should be aware of the delivery dates under the available transportation. Misalignment between transportation and production might lead to delays in delivery. The production end of the supply chain should know about the consequences of not meeting the deadlines.

• Understanding The Delivery Requirements Of The Retailers

OTIF standards might vary by retailer. Some might allow the products to be delivered 1 or 2 days earlier or late. So it becomes important to understand the requirements of retailers. This will decide the fate of the flow of the supply chain. 

• Get A Clarity On Must Arrive By Date

The date set by the buyer on when the products should reach the distribution center is known as Must Arrive By Date (MABD). It becomes important to get in touch with the receiver because MABD is not connected to the receiving locations. This should be done especially when there is a change in the order quantity because it will affect the overall OTIF score.

• Negotiate On The Due Date With The Buyers

Retailers are often open to negotiating on due dates with the suppliers. This is because their only motive is for the products to reach the store shelves. The only problem is that it won’t be easy to do this process. They need to be convinced with the necessary data that proves that a small change in the due date won’t affect the overall OTIF score. 

• Communication With Warehouses

Clear communication with the warehouses ensures that they’re picked, packed, labeled, and sorted by the due date. Failure to do so might result in delays in the overall supply chain like a butterfly effect. 

• Create A Cost Effective Network Model

It is always a good idea to choose a 3PL provider that has locations of its network close to receiving locations. This will eventually make it very cost-effective due to the amount of time that could be saved on transportation. This also depends upon where your production facility as well as warehouse are located. 

• Whom You Choose As A Carrier Matters

Choosing a 3PL partner with multiple years of cross-border experience in the GCC should be one of the primary factors. This will ensure meeting the OTIF scores consistently and reducing the delays drastically. How much experience they have in the retail industry also matters. After meeting the right partner, it is important to finalize on the transit times.

•  Adjustment Of Minimum Order Quantity

In reality most of the time, the “In-Full” aspect of the OTIF won’t be able to get fulfilled by the suppliers. So, arriving at a “Minimum Order Quantity” after discussing with the supplier will become necessary. This will make inventory management stable in the long run. 

• Lead Times With Extra Padding

Delays during transit can happen due to various reasons like sudden changes in rules and regulations of customs laws, fluctuations in supply/demand, issues related to the processing of FASAH, and systems getting slowed down at customs. It will be a good idea to provide a lead time to the 3PL partner so that there will be enough buffer time.

1. Tracking

Getting updates on the current status of your shipments is very important to calculate OTIF scores. Late deliveries and other factors that might lead them to be late could be prevented when there is visibility on where your shipments are located.

1. Carrier’s Network

There will be situations where the carrier won’t be able to deliver to a particular location since it’s not part of their network, leading to further delays. Try to understand where all the carrier has their presence and how often they move through those locations.

1. LTL To Cut Costs And Improve Efficiency

If you ship goods frequently regardless of the volume then LTL might be the right way to do it. The fuel expenses are shared with other shippers and you will only have to pay for the amount of space utilized within the truck.

1. Holding The Shipments vs. Sending Short

Sometimes your manufacturer won’t be able to keep up with the demands, so holding the shipments until the rest has arrived and then sending them all together will have a significant impact on the OTIF scores. Assess the situation and send the shipments accordingly.

1. Usage Of Data

You will get a better understanding when you go through the logistics data. Look for underperforming areas like when, where, and how your pickups and drop-offs became late, and then make sound decisions based on those variables.