In supply chain management, OTIF (On-Time, In-Full) measures a supplier’s ability to deliver goods at the right time and in the correct quantity. It’s a key performance indicator (KPI) that ensures efficient fulfillment and smooth operations.
A high OTIF score helps suppliers build strong relationships with retailers and wholesalers by reducing delays, preventing stockouts, and ensuring that inventory flows smoothly.
In this blog, we’ll explore what OTIF means, how it’s measured, the challenges that impact performance, and the best strategies for improving it.
What Does OTIF Mean?
OTIF (On-Time, In-Full) is a crucial supply chain metric that evaluates the reliability and efficiency of deliveries. It was first introduced by Walmart in 2017 as a way to improve supplier performance and ensure that products arrive as expected. Since then, OTIF has become a widely adopted key performance indicator (KPI) across the retail and wholesale industries.
OTIF consists of two key components:
- On-Time: Ensuring shipments arrive at the scheduled delivery time, avoiding delays that could disrupt inventory management and sales.
- In-Full: Confirming that the order is complete and has the correct quantity and products, minimizing backorders and shortages.
However, OTIF calculations can vary between businesses. Some retailers have stricter definitions of “on-time,” requiring deliveries within a precise window, while others allow more flexibility. Likewise, the “in-full” requirement may depend on whether substitutions or partial shipments are acceptable.
OTIF involves three key parties in the supply chain: the merchant (retailer or wholesaler), the vendor (supplier or manufacturer), and the transporter (carrier or logistics provider). Each plays a critical role in ensuring that deliveries meet OTIF requirements. Maintaining a high OTIF score requires coordination across the entire supply chain to ensure efficiency and accuracy.
What is a Good OTIF Score?
In an ideal supply chain, all businesses should strive for 100% OTIF compliance, ensuring that every order is delivered on time and in full.
However, maintaining a perfect OTIF score can be challenging due to factors like transportation delays, supply chain disruptions, and demand fluctuations. In practice, a solid OTIF rate falls between 80% and 90%, indicating a well-functioning supply chain with room for improvement.
Anything below this range may suggest inefficiencies such as delayed shipments, incomplete orders, or mismanaged inventory, which can lead to financial penalties, lost sales, and strained vendor relationships.
How to Calculate OTIF
Calculating OTIF is straightforward, but the specific criteria for “on-time” and “in-full” may vary depending on industry standards and business agreements. OTIF is composed of two distinct metrics:
- On-Time: (Delivery Time) – (Confirmed delivery time)
A delivery is considered on time if it arrives within the agreed-upon window, whether that is within a few hours, a full day, or another predetermined timeframe. - In-Full: (Cases matching the criteria) / (Total number of cases)
An order is considered in full if it contains the exact quantity of items specified in the purchase order. Any shortages, substitutions, or damages can lower this metric.
OTIF Formula
To determine the overall OTIF percentage, both on-time and in-full metrics must be met for a delivery to count as successful. The standard OTIF formula is:
- OTIF%= (Number of orders delivered on-time and in-full / Total number of orders) × 100
For example, if a company ships 1,000 orders in a given period and 950 meet both on-time and in-full requirements, the OTIF score would be:
- (950 / 1000) × 100 = 95%
Supply Chain Benefits of High OTIF Performance
Maintaining a high On-Time, In-Full (OTIF) score is essential for smooth supply chain operations, meeting retailer and wholesaler expectations, and improving supply chain efficiency. Prioritizing OTIF performance enhances reliability, reduces costly disruptions, and strengthens business relationships.
- Increase Customer Satisfaction: Retailers and wholesalers rely on suppliers to deliver on time and in full to prevent stockouts and backorders. A strong OTIF score builds trust, enhances reliability, and improves the end customer’s experience.
- Reduce Operational Costs: Late or incomplete deliveries lead to penalties, expedited shipping fees, and additional labor costs. Optimizing OTIF performance helps suppliers lower these expenses and improve logistics efficiency.
- Improve Inventory and Demand Planning: A high OTIF score ensures better inventory management, preventing overstocking and shortages. By aligning production with demand, suppliers can reduce waste, optimize storage, and streamline fulfillment.
- Strengthen Retailer and Wholesaler Relationships: Suppliers that consistently meet OTIF expectations position themselves as preferred vendors. Proactive communication and performance improvements help maintain strong, long-term partnerships while avoiding penalties.
- Gain a Competitive Advantage: Meeting OTIF targets sets suppliers apart in a competitive market. Reliable delivery performance helps secure new business, strengthen contract negotiations, and enhance overall supply chain reputation.
Common Challenges Affecting OTIF Performance
Maintaining a high On-Time, In-Full (OTIF) score comes with several challenges, many of which stem from supply chain inefficiencies and lack of coordination.
Supply Chain Inefficiencies
A poorly optimized supply chain can negatively impact OTIF performance. Inventory management issues—such as stock shortages, slow replenishment cycles, and lack of real-time visibility—can prevent suppliers from fulfilling orders as expected. Additionally, inefficient warehouse operations, manual processes, and limited carrier capacity can slow down fulfillment, increasing the likelihood of missed delivery windows and incomplete orders.
Supply Chain Disruptions
External factors like extreme weather, labor shortages, and transportation delays can make it difficult for suppliers to meet OTIF commitments. Unexpected delays at ports, trucking shortages, or last-mile delivery issues can disrupt the supply chain, causing shipments to arrive late or incomplete.
Lack of Communication and Visibility
As supply chain complexity increases, so does the challenge of maintaining clear communication between suppliers, logistics providers, and retailers. Without shared real-time data and visibility into shipment status, businesses may struggle to anticipate potential disruptions, leading to delays and inventory shortages. Improved collaboration, proactive updates, and integrated supply chain management systems can help minimize these issues.
Inaccurate Demand Forecasting
Poor demand forecasting leads to misaligned inventory levels, resulting in either stockouts or excess inventory. Overestimating demand can cause unnecessary overstocking while underestimating demand can leave retailers short on essential products. Without accurate data and predictive analytics, businesses risk fulfillment inefficiencies that lower OTIF performance.
6 Ways to Improve OTIF Performance
For suppliers, maintaining a high OTIF score is essential for meeting retailer expectations and maintaining smooth operations. Here are some ways you can improve your OTIF performance:
1. Establish Clear OTIF Standards and Accountability
A common challenge for suppliers is the lack of consistent OTIF measurement criteria across different retailers. Establishing internal OTIF benchmarks ensures that every product line and shipment adheres to the same high standards. Additionally, defining clear accountability across teams—from warehouse staff to logistics providers—helps improve coordination and execution.
2. Leverage Real-Time Supply Chain Visibility
Visibility is key to identifying and resolving delivery bottlenecks before they impact OTIF performance. Implementing real-time tracking systems allows suppliers to monitor shipment progress, detect potential delays, and take corrective actions to ensure on-time deliveries. Supply chain visibility also enhances communication with retailers, enabling more accurate delivery estimates and reducing disputes over late shipments.
3. Optimize Warehouse and Fulfillment Operations
Efficient warehouse management plays a crucial role in ensuring shipments are processed accurately and dispatched on time. Investing in warehouse management systems (WMS) helps suppliers track inventory levels in real time, reduce order errors, and streamline delivery processes. Additionally, optimizing distribution center workflows and reducing load times can prevent unnecessary delays that negatively impact OTIF performance.
4. Analyze and Address Root Causes of OTIF Failures
Suppliers should not only track OTIF performance but also analyze trends in late or incomplete deliveries. Identifying inefficiencies in supply chain processes, such as carrier delays, fulfillment errors, or inaccurate inventory data, allows suppliers to proactively adjust their strategies. A data-driven approach helps suppliers improve delivery reliability and avoid recurring OTIF failures.
5. Strengthen Supplier-Retailer Collaboration
Open communication with retailers is essential for ensuring that both parties are aligned on OTIF expectations. Regular supply chain performance reviews should be established with retailers to discuss compliance trends, potential challenges, and opportunities for process improvements. Additionally, suppliers should validate OTIF penalties, ensuring that any fines are justified and not caused by delays outside their control, such as retailer-side inefficiencies.
6. Diversify Logistics and Transportation Strategies
Relying on a single carrier or fulfillment strategy can increase the risk of delays. Suppliers should explore multi-carrier shipping solutions, regional distribution centers, and contingency logistics plans to increase flexibility and reduce dependencies on any single system. Diversified transportation networks help mitigate disruptions and improve overall delivery reliability.
How BrightPearl Can Help Improve OTIF
Achieving a high OTIF score requires seamless coordination between suppliers, logistics providers, and their retail or wholesale partners. BrightPearl’s order management and fulfillment solutions provide suppliers with the tools they need to improve delivery accuracy, reduce delays, and meet OTIF targets consistently.
With automated order processing, suppliers can eliminate manual inefficiencies that slow down fulfillment. BrightPearl’s system ensures that orders are processed and shipped with minimal errors, reducing the risk of incomplete or late deliveries. Real-time tracking provides full visibility into order status and shipment progress, enabling suppliers to proactively address potential disruptions before they impact OTIF performance. Additionally, data analytics allows suppliers to monitor key OTIF metrics, identify trends in delivery performance, and make informed decisions to optimize inventory management and logistics planning.
By leveraging BrightPearl’s technology, suppliers can streamline their operations, strengthen relationships with retailers and wholesalers, and ensure that deliveries consistently arrive on time and in full.
Delivering On-Time, In-Full—Every Time
On-Time, In-Full (OTIF) is a critical metric for suppliers, ensuring that deliveries meet retailer and wholesaler expectations with both accurate timing and complete orders. A strong OTIF score enhances supplier reliability, improves supply chain efficiency, and strengthens business relationships.
Maintaining high OTIF performance requires proactive supply chain management, accurate demand forecasting, and optimized logistics operations. By leveraging technology like automated order processing, real-time tracking, and data analytics, suppliers can gain full visibility into their fulfillment process and address potential issues before they impact delivery performance.
BrightPearl’s order management and fulfillment solutions provide suppliers with the tools they need to streamline operations, reduce errors, and meet OTIF targets consistently. Want to see how it works? Book a demo today and discover how BrightPearl can help your business deliver on time, in full—every time.
