What is OTIF?
OTIF is an abbreviation for on-time and in-full. It is a supply chain measurement for orders and deliveries and is accomplished when the requested quantity of ordered products shows up in the desired location at the correct time.
There can be leeway on how OTIF is measured, depending on the circumstances. For example, sometimes 10 units short will be accepted as in-full, or delivery a day late might still be considered on-time.
With a low OTIF, a business can run into potential penalties and opportunity costs. In turn, trying to drive a high OTIF score without the right business processes can lead to inefficiency costs. Many businesses are paying too much for a high OTIF score by frequently paying to expedite deliveries, changing the production schedule every week, running inefficient production quantities, and delaying payments from customers. A Food Business can learn how to not suffer financial penalties through a variety of avenues.
How can I improve my OTIF?
1. Familiarize yourself with the policies. Review and confirm your customer’s requirements. Ensure that you understand how they measure on-time and in-full.
2. Understand appointment scheduling. Confirm whether your customers require strict appointment windows or have open schedules. If you are required to reschedule an appointment, that does not necessarily mean that you are complaint. Always follow up and ensure that PO’s or appropriate documents are updated to reflect changes.
3. Align production and transportation. Ensure that your products are ready to leave the facility when the trucks arrive. Using a robust S&OP tool can be a great help in this process. A lack of a proper tool is often the biggest culprit of low OTIF scores.
4. Streamline your communication. Ensure that the various functions of your operations are on the same page. Have clear lines of communication throughout purchasing, production, distribution, sales, and marketing. Expediting and cherry-picking to ensure that you achieve your OTIF numbers might be doing more harm than good. A good S&OP business process can support and reduce the headaches and whiplash.
Are you being penalized for poor OTIF or driving additional costs to meet OTIF requirements? Adroit can help you improve OTIF in more ways than one. We tailor the supply chain solution toward the needs of your food business.
Follow Adroit’s improvement protocol and visit our website for more supply chain strategies and tips. Contact us for a free assessment and supply chain planning solution demo.