It may seem simplistic, but On-Time, In-Full (OTIF), can be one of the most critical performance indicators in modern supply chain.
This is because it is often indicative of overall supply chain health. A consistently low OTIF score is rarely just a logistics problem. It’s typically a symptom of deeper issues in forecasting, inventory management, production planning, or warehouse operations. This makes it an excellent indicator of the overall health and efficiency of a company’s supply chain.
This guide will break down what OTIF is, the challenges in measuring it, and most importantly, provide actionable strategies to improve performance for both suppliers and buyers.
What is On-Time, In-Full (OTIF)?
OTIF is a metric that measures whether an order was delivered according to the customer’s specifications. As the name suggests, it has two core components:
On-Time: This seems simple, but it’s more nuanced than just not being late. A delivery that arrives too early can be just as disruptive as one that is late, causing congestion and creating storage headaches for the customer. The “on-time” window is often a precise date or time slot, sometimes called the Must Arrive By Date (MABD), agreed upon by supplier and client.
In-Full: This component measures whether the customer received the exact quantity of the product they ordered. For most industries, this means no more and no less. However, the definition can be flexible. For example, in the medical or chemical industries, where manufacturing batch sizes can vary, the “in-full” criteria might be met as long as the customer receives at least the quantity they ordered.
The ultimate goal of OTIF is to ensure the perfect order: the right products, in the right quantity, at the right place, at the right time.
Defining OTIF in my industry
One of the biggest problems with the OTIF KPI is the lack of a universal definition. This ambiguity can cause significant friction between supply chain partners, such as manufacturers, distributors, and retailers.
According to research from McKinsey, different stakeholders often interpret the metric in vastly different ways:
“Does ‘on-time’ mean on the date requested by the retailer, or the date promised by the manufacturer? Does it mean within the specific delivery slot allocated to the shipment, or any time inside a broader, agreed-upon time window? Should ‘in-full’ be measured at the level of complete orders, line-items or individual cases?”
These aren’t just semantic differences, they have real-world consequences. When partners have different definitions of success, they spend more time arguing over the data than addressing the root causes of delivery failures.
Why OTIF Matters: The Buyer vs. The Supplier Perspective
In essence, OTIF is a reflection of the health of a trading relationship. Both sides of the transaction, the supplier selling the goods and the buyer receiving them, view OTIF through a different lens, yet its importance is shared.
The Supplier’s Perspective: Efficiency and Reputation
For a supplier (a manufacturer or distributor), achieving a high OTIF score is a measure of operational excellence and financial stability.
The most immediate concern is financial. Major retailers can impose significant penalties and chargebacks for failing to meet OTIF standards. Consistently high scores avoid these margin-eroding fines and often lead to faster invoice payments, improving cash flow.
A high OTIF score also builds trust and establishes the supplier as reliable. This can lead to becoming a “supplier of choice,” which translates to better partnership terms, preferential shelf placement for products, and more opportunities for growth with the retailer.
Conversely, a low OTIF score is a red flag for internal problems. It signals potential issues in demand forecasting, production scheduling, warehouse management, or transportation logistics. It forces a supplier to look inward and fix broken processes.
The Buyer’s (Retailer’s) Perspective: Sales and Customer Satisfaction
For a buyer (typically a retailer), receiving orders OTIF is fundamental to their entire business model. Their focus is on keeping shelves stocked to meet consumer demand.
The number one priority is preventing stock-outs. A customer who can’t find their desired product might buy a competitor’s brand or, worse, leave to shop at another store. Reliable OTIF performance directly protects revenue.
Predictable deliveries allow retailers to maintain lean, efficient inventory levels. When they trust a supplier will deliver on time, they don’t need to hold as much expensive safety stock to buffer against delays. This reduces warehousing costs and frees up capital.
A retailer’s distribution center is a highly synchronised operation. On-time deliveries allow them to schedule labor and manage dock space efficiently. Late or early arrivals cause congestion and throw these carefully planned schedules into chaos.
How to Improve OTIF: 12 Actionable Strategies
Improving your on-time delivery performance isn’t an overnight fix. It requires a strategic approach that combines communication, planning, and data analysis. Here are proven strategies to boost your OTIF score.
Foundational Alignment
1. Understand Retailer Requirements
OTIF is not a one-size-fits-all metric. Major retailers will have their own specific compliance programs. Learn the ins and outs of each customer’s requirements, including their definition of “on-time” (e.g., exact day vs. a 2-day window) and “in-full.”
2. Master Appointment Scheduling
The MABD is set by the buyer, but securing a delivery appointment at the receiving location is a separate, critical step. Some distribution centers have strict, inflexible hours. Proactively schedule your appointments and confirm that the approved time still falls within your MABD.
3. Align Production and Transportation
A common failure point is a disconnect between when goods are ready and when the truck is scheduled to leave. Ensure your production and OTIF manufacturing teams understand the critical ready-by and ship-by dates. A delay on the factory floor will create a domino effect across the entire delivery timeline.
Strategic Adjustments
4. Rethink Your Network Configuration
If you consistently struggle with deliveries to a key customer, it may be time to re-evaluate your warehouse network. Shifting inventory to a warehouse closer to their distribution centers can cut transit times and add a valuable buffer.
5. Request Due Dates That Fit Your Schedule
Don’t be afraid to negotiate. If a retailer’s requested MABD doesn’t align with your production cycle, present them with data-backed reasoning for an adjustment. Buyers often prefer a reliable supplier with a realistic delivery date over an unreliable one that constantly misses an unrealistic deadline.
6. Renegotiate Minimum Order Quantities (MOQ)
If you struggle to meet the “in-full” component, your MOQ or ordering cadence might be the problem. Work with your buyers to find a rhythm that allows you to build enough inventory to fulfill orders completely and profitably.
Tactical and Operational Excellence
7. Evaluate Consolidation Opportunities
Strategies like consolidating deliveries onto a single vehicle or using a pallet network can significantly improve service levels and reduce costs. Grouping consignments destined for a particular region can make tracking more manageable and service more reliable. However, monitor this closely. If consolidated loads are causing you to miss strict delivery windows, you may need to arrange dedicated transport for time-sensitive customers.
8. Build-In Sufficient Lead Time
Rushing is a recipe for failure. Whenever possible, build a buffer day into your transport schedule. This extra time is invaluable for absorbing unexpected delays from motorway congestion, adverse weather, or issues at a distribution centre. An extra day of padding can be the difference between a successful delivery and a costly OTIF failure, especially during peak periods like Christmas or Black Friday.
9. Work with Preferred Providers
Not all logistics providers are created equal. Partner with hauliers who have a proven track record of success with your key customers. Their experience with specific regional distribution centres (RDCs), booking systems, and delivery requirements is a significant advantage.
Data and Technology
10. Get Real-Time Visibility
You can’t manage what you can’t see. Work with a logistics provider that offers real-time order tracking. This visibility allows you to be proactive, identify potential delays early, and intervene before a delivery is late.
11. Leverage Logistics Data
Your OTIF score is just the beginning. Dive deeper into your transportation analytics. Are pickups from a specific facility consistently late? Are certain lanes more prone to delays? Use data to diagnose the root cause of failures instead of just treating the symptoms.
12. Weigh the Benefit of Sending Short vs. Delaying
If your customer calculates “on-time” and “in-full” separately, you have a strategic choice. If your on-time score is high but your production is behind, it may be better to delay the shipment by a day to send it in-full, rather than sending it on-time but short and damaging your in-full metric. Know your scores and your customer’s thresholds to make the smartest decision and minimize penalties.
Partnering for OTIF Success
Mastering OTIF is a continuous journey of diagnosis, adjustment, and improvement. The complexities of retailer requirements, carrier networks, and data analysis can be overwhelming.
Working with a retail logistics expert can provide the specialized knowledge and technological solutions needed to excel. A strong partner brings a reliable carrier network, deep industry expertise, and the data-driven insights required to transform your on time in full KPI from a point of stress into a competitive advantage.
About the authors
We are independent supply chain and warehouse consultants specialising in data analysis, leading strategy, and bringing a fresh perspective to your supply chain challenges.