OTIF is short for “On Time In Full”, and refers to receiving a delivery on the agreed date and location without delays, and with the correct amount of the items that was ordered. An improved OTIF help to drive down cost and improves customer satisfaction as well.
The OTIF looks at all the functions within your company that goes into it. For example order entries have to be correct, ability to maintain appropriate inventory level from procurement, correct handling and pulling of material etc.
The OTIF number gives an overview of how your company is doing, and when analysing the up/down movement; problems within the company can be revealed.
- On Time: This part of OTIF is the commitment made to the costumer. For example if you committed to deliver before 2pm or Wednesday, then that becomes the measurement. If delivered within that time, it is considered On Time.
- In Full: This means if you delivered the amount ordered, and is not rated at percentage of parts received. For example, if 95% of the items were delivered it is not considered 95% in full, but just not in full.
If you substitute with other material, pull material from another location or supplier it is considered not in full. The costumer might not experience the difference in the above scenarios, but it is shortfalls in your process and increases cost.
If you don’t measure OTIF at the moment, the chances are that it is lower than you expect it to be. In order to be above 90%, it has to be driven to that level.
Implementing OTIF is a great continuous improvement initiative, which visibly will improve your bottom line result. Remember what isn’t measured or visible to the business, can’t be improved.
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