otif

What is OTIF and How to improve it?

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On Time In Full, popularly known as OTIF, is an important metrics to calculate the performance of your supply chain. It analyzes the entire chain to inquire if the product desired by the customers reaches to them on time and in the quality they ordered. It directly helps you to know how effective and efficient your supply chain is at fulfilling its objective. 

 

OTIF defines the number of orders delivered to your customers on time with correct quality, volume, and on the day as desired by the customer. Calculating OTIF help you know if:

 

  • The desired quality has been delivered.
  • The correct quantity has been delivered.
  • The quality matches to the standard level as proposed by the customer.
  • The order has been delivered at the desired place as asked by the client on time.

 

How to calculate OTIF effectiveness?

It is simple and easy to calculate OTIF. Divide the number of OTIF order by the total number of orders and multiply the result with 100. For example, out of 50 orders you delivered 45 OTIF orders then the OTIF of your plant is 90%. 

 

How to improve OTIF?

 

1. Identify the non-value adding parameters 

Although businesses are well-aware of the importance of OTIF, they are unable to deliver the same to their customers. It is because there are various parameters in the supply chain that directly or indirectly affects the OTIF metrics. And, such parameters are responsible for causing the delays and decreasing the OTIF effectiveness.

 

The parameters causing the delay are called Non-Value Adds (NVAs) and are detected by employing methodologies like Lean Manufacturing and Theory of Constraints. So, identify the NVAs and improve or eliminate them by implementing solutions like Automation, ERP, IoT, or Robotics. 

 

2. Introduce stringent machine health check up 

Any breakdown in the machine can lead to a significant delay in the process. So, there is a need to bring a habit change in machine maintenance. You must introduce preventive maintenance and conditional monitoring of your machines. Develop a health check-up plan for your machines to examine them for CLRI, i.e. Cleaning, Lubrication, Retightening, and Inspection. 

 

3. Remove documentation mistakes

Mistakes in documents like misspelled address, incomplete order forms, and incomplete information, etc., they all contribute in delaying the order delivery.  Such a mistake can happen from the client as well as your end. So, remove this by introducing a centralized system or an ERP system for consolidating the important information required for successful OTIF.

 

4. Forecast material needs 

A plant manufacturer must store or buy raw material only when needed and not before. Also, if your plant carries too little stock, it can put a real dent in your OTIF. There is a need to introduce intelligent inventory software that categorizes the material based on the urgency of the requirement. The material can be classified as:

 

  • Planned Dynamic (PD): Material required over a stipulated time 
  • Planned Static (PS): Mandatory and everyday materials 
  • Random Unplanned (RM): All the unplanned and urgent materials

 

When it comes to a warehouse, it is not about how much space you have. It is more about how effectively you utilize the space. The best way is to keep fast-moving and high-selling materials in the vicinity of laborers. This saves time which is otherwise wasted in traveling to the farthest warehouses. 

 

5. Eliminate logistic problems

Logistical problems are one of the reasons why product delivery gets delayed. Lack of process standardization, real-time traceability, and human intervention all are the contributing factors. Therefore, there is a need to adopt disruptive technologies like Automation for improving the logistics process and ascertaining the shipping and delivery on time, with zero damage.

 

Remember that ‘Time is everything’. And, if you wish for customer fulfillment, your order must process, pack, ship, and deliver on time in full quality and quantity to the customer. And, improving the factors mentioned above ensures to increase your OTIF score to a significant level.