What is On Time In Full (OTIF)?
How to calculate OTIF as a KPI?
On Time In Full is a KPI applicable in almost all industries, such as manufacturing and services, in both B2B and B2C businesses. On Time In Full is typically related to the Order-to-Cash process and customer satisfaction. The OTIF calculation often varies depending on the organization’s goals. However, some common characteristics can be identified.
The OTIF definition consists of two parts - on time & in full. It is often used as a KPI measuring the efficiency and accuracy of delivery in supply chain.
Delivered On Time
- Organizations define a time which they should be able to reach.
- This can be requested delivery date, production cycle, or agreed response time.
- One typical on time criteria is that the delivery should not be late. However, what is equally important is that the delivery should not be too early either. If a case is closed much faster than average, it typically means some exceptions have been made.
Delivered In Full
- The most common way to define in full is that customer gets exactly the amount they have ordered.
- However, for example in medical industry, the manufactured batch size varies, and the in full criteria should be defined so that customer gets at least the amount they have ordered.
OTIF formulas:
On Time In Full = (Cases matching the criteria) / (Total number of cases)
On Time = (Delivery time) - (Confirmed delivery time)
- In this case, the organization should be able to match a promised delivery time and there is no lower limit, meaning it is not a problem if a case is delivered very early.
- Target: => 0
In Full = (Delivered amount) - (Confirmed amount)
- Target: = 0, if the delivered amount should be exactly what is promised.
Learn more about this OTIF KPI in our on-demand webinar.
How to improve OTIF? A 3-step solution enabled by QPR ProcessAnalyzer.
1. Identify and reduce changes.
Conduct process analysis to gain a better understanding of why the OTIF KPI is not met. Some analysis examples are: requested delivery vs outbound delivery, delivered once vs delivered several times.
2. Identify bottlenecks.
In order to locate root causes for deliveries that take longer than average, run a duration analysis and select the relevant cases for influence analysis.
In order to locate root causes for deliveries that delivered more than once, select the looping events for influence analysis.
3. Automate in right places.
As you identify changes and bottlenecks for improvement, your OTIF KPI should look better than before the improvements. To take it further, you can work on reducing the variations and improving the conformance. As the compliance improves, some of your subprocess should be ready and beneficial for automation, reducing human errors and improving the KPI.
Read more about other KPIs related to the Order-to-Cash process:
Learn more about improving on-time delivery and logisitics and supply chain processes:
Logistics Process Improvement - Root Cause Analysis by Process Mining
