What is OTIF?

On-Time In-Full (OTIF) is a key supply chain performance metric that measures the efficiency and reliability of deliveries. It evaluates whether a supplier delivers the correct quantity of goods (In-Full) at the agreed-upon time (On-Time). OTIF is widely used in retail, manufacturing, and logistics to assess supplier performance and ensure smooth supply chain operations.

OTIF is particularly important for businesses that rely on just-in-time inventory systems, where delays or incomplete shipments can disrupt operations, increase costs, and reduce customer satisfaction. Companies with high OTIF scores demonstrate strong supply chain reliability and efficiency.

How OTIF is Measured

OTIF is calculated using two primary components:

• On-Time Delivery – Measures whether the shipment arrived at the scheduled time or within the agreed delivery window.
• In-Full Delivery – Ensures the entire order quantity was delivered as requested, without shortages or substitutions.

OTIF Formula

OTIF (%) = (Number of On-Time & In-Full Deliveries ÷ Total Number of Deliveries) × 100

For example, if a supplier makes 100 deliveries and 85 of them arrive on time and in full, the OTIF score would be:

(85 ÷ 100) × 100 = 85%

A higher OTIF percentage indicates better supply chain performance, while a lower OTIF score suggests inefficiencies such as late shipments, incomplete orders, or supply chain disruptions.

Why OTIF is Important

Improved Customer Satisfaction

Ensuring timely and complete deliveries enhances customer trust and satisfaction. Businesses that consistently meet OTIF targets strengthen relationships with retailers, distributors, and end consumers.

Reduced Supply Chain Costs

Late or incomplete deliveries can result in penalties, increased storage costs, and expedited shipping fees. Maintaining a high OTIF score minimizes these expenses and improves operational efficiency.

Better Supplier and Carrier Performance

OTIF helps businesses assess the reliability of suppliers and logistics partners. Companies use OTIF metrics to identify underperforming suppliers and negotiate better terms or alternative solutions.

Compliance with Retailer Standards

Large retailers, such as Walmart and Amazon, enforce strict OTIF requirements for suppliers. Non-compliance can lead to financial penalties, reduced shelf space, or loss of business.

Common Causes of Low OTIF Scores

Logistics and Transportation Delays

Traffic congestion, port backlogs, and carrier capacity issues can lead to late shipments.

Inventory Shortages

A lack of raw materials or finished goods can prevent suppliers from fulfilling orders in full.

Poor Demand Forecasting

Overestimating or underestimating demand results in inventory imbalances that affect delivery performance.

Order Processing Errors

Incorrect order fulfillment, mislabeling, or warehouse inefficiencies can lead to missing or incorrect items in a shipment.

Regulatory and Compliance Issues

Customs delays, trade restrictions, or compliance failures can slow down international shipments.

Strategies to Improve OTIF

Supply Chain Automation

Automating order processing, inventory management, and shipping coordination reduces human errors and improves efficiency.

Real-Time Tracking and Visibility

Using IoT and GPS tracking enables businesses to monitor shipments in real time and proactively address delays.

Stronger Supplier Collaboration

Building strategic partnerships with suppliers ensures better alignment on production schedules, inventory planning, and delivery commitments.

Demand Forecasting and Inventory Optimization

Using AI-driven analytics to predict demand and adjust inventory levels helps prevent stockouts and overstocking.

Diversified Carrier Networks

Working with multiple logistics providers reduces dependency on a single carrier and minimizes transportation risks.

Conclusion

OTIF is a critical supply chain metric that ensures timely and complete deliveries, improving customer satisfaction and reducing operational costs. By monitoring OTIF performance, businesses can identify weaknesses in their supply chain, improve logistics coordination, and strengthen supplier relationships.