What is OTIF?
OTIF stands for On-Time In-Full. It's a key performance indicator (KPI) used in supply chain management to measure the efficiency and accuracy of order fulfillment.
What does it measure?
OTIF measures the percentage of orders that are delivered on time and in the exact quantity ordered. It takes into account both the delivery time and the accuracy of the order fulfillment.
Why is OTIF important?
A high OTIF score indicates a well-functioning supply chain and strong customer satisfaction. It shows that a company is able to:
- Meet customer expectations: Delivering orders on time and in full is crucial for customer satisfaction and retention.
- Optimize inventory: Efficient order fulfillment helps reduce excess inventory and avoid stockouts.
- Improve operational efficiency: A high OTIF score often reflects streamlined processes and effective resource allocation.
How is OTIF calculated?
OTIF is calculated using the following formula:
OTIF = (Number of orders delivered on time and in full / Total number of orders) x 100%
For example, if a company delivers 90 out of 100 orders on time and in full, its OTIF score would be 90%.
By tracking and improving OTIF, businesses can enhance their supply chain performance and strengthen their customer relationships.