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On Time In Full (OTIF): What It Is and Why It’s Important

Paula Durà Paula Durà
 - 3 minutos

Have you ever wondered how to measure the efficiency of your supply chain? How can you know if your products are being delivered on time and in full? The answer lies in the OTIF indicator: On Time In Full.
 In this article, we explain what this term means and why it is essential for the success of any business that manages a supply chain.

What is OTIF?

OTIF stands for On Time In Full, a key performance indicator (KPI) used in logistics and supply chain management. This indicator measures the efficiency of a logistics process by evaluating whether orders are delivered on time (On Time) and in full (In Full).
 Simply put, if an order is delivered on the promised date and with all the correct items, the order is considered OTIF. This KPI is crucial for both suppliers and customers, as it reflects a company’s ability to meet delivery expectations.

Why Is OTIF Important?

OTIF is a highly valuable indicator for businesses for several reasons. Here’s why this KPI is essential for the smooth running of your logistics:

  1. Improves Customer Satisfaction
     When a company delivers products on time and in full, it creates a positive experience for the customer. A high OTIF reflects good customer service, which can improve loyalty and recommendations. Late or incomplete deliveries can cause frustration, leading to the loss of customers.

  2. Optimizes the Supply Chain
     OTIF allows you to identify weak points in the supply chain. If an order is not delivered on time or in full, the company can analyze the processes that failed, whether it’s inventory management, transportation, or order preparation. This way, informed decisions can be made to improve efficiency and avoid recurring problems.

  3. Reduces Operational Costs
     When orders are delivered on time and in full, costs associated with returns, customer complaints, and handling incorrect orders are reduced. A high OTIF can also contribute to better inventory management and more effective planning, which reduces the risk of overstocking or stockouts.

  4. Increases Competitiveness
     Companies that manage to maintain a high OTIF demonstrate their ability to manage efficient logistics. This level of efficiency is a competitive differentiator, as customers highly value delivery reliability. Companies with a good OTIF are seen as more reliable and have an advantage over the competition.

How to Improve OTIF in Your Business?

Improving OTIF is crucial to ensuring customer satisfaction and operational efficiency. Here are some tips to improve this indicator:

  1. Optimize Inventory Management
     Good inventory management is key to ensuring that products are available when customers request them. Using warehouse management software can help you maintain precise stock levels, preventing both stockouts and excess inventory.

  2. Collaborate Closely with Your Suppliers
     It’s essential to work hand in hand with suppliers to ensure deliveries are seamless. Maintain good communication with them to manage any unforeseen circumstances that could affect delivery time or product quantities.

  3. Automate Logistical Processes
     Automating order management and shipment tracking helps reduce human errors and speed up processes. With automation, you can improve accuracy in order preparation and ensure the correct products reach customers on time.

  4. Constantly Monitor Performance
     It’s important to continuously monitor OTIF to detect any areas that need improvement. Setting up a proper tracking system will allow you to identify improvement points and act quickly to fix any issues in the logistics process.

Conclusion

OTIF is an essential KPI for measuring the effectiveness of logistics and customer satisfaction. Maintaining a high OTIF not only improves customer experience but also optimizes the supply chain, reduces operational costs, and enhances the company’s competitiveness.
 If you want to improve OTIF in your business and optimize your logistics processes, Amphora Logistics offers solutions tailored to your needs. Automate your logistics processes with our help and take your supply chain efficiency to the next level. Contact us today and discover how we can help you improve your OTIF and grow your business!