Inzichten in supply chain

How to measure OTIF

Most companies measure OTIF wrong.

Last week I wrote about why OTIF matters. Today's Supply Chain Monday: how to actually measure it. Because the definition you choose changes everything.

There are roughly 4 different ways to measure OTIF:

1. Order lines vs. entire orders — Measure by order line = more granular, easier to spot patterns.
2. Measure by full order = stricter, closer to what the customer actually experiences.
3. Quantity delivered vs. quantity requested. Did you ship 95 of 100 units? That's not OTIF.
4. Confirmed date vs. requested date. This one causes the most internal debates. Using the confirmed date hides planning problems. Using the requested date reveals them.

In terms of OTIF, what's most important? It's what your customer considers most important. Measuring OTIF starts by understanding the needs of your customer.

And is OTIF the same as a perfect order? What's a perfect order in your company?

Why measure OTIF

"If things are going well, why bother measuring OTIF?"

It's Supply Chain Monday and I'll tell you why this is one of the most critical KPIs.

When OTIF isn't measured, companies often rely on perception instead of facts:

• Sales believes service is great.
• Operations believes delays are occasional.
• Management believes customers are satisfied.

Sometimes they're right. But they don't know what they don't know.

OTIF is more than a logistics KPI: it's the mirror of how well the whole company executes its plan.

OTIF (On Time In Full) matters because it tells you:

• What customers really experience
• Whether teams across the company deliver consistently
• Where supply chain problems start
• If service improvements come from better planning… or just more inventory

So when a company tells me: "We don't measure OTIF and things are going well."

My answer is usually: "Great. Let's measure it and prove it." Because the best supply chains don't just hope service is good. They know it.

Do you think a company can do without measuring OTIF?

Sales vs Operations

This Supply Chain Monday: does it feel like competition is present not only outside your organization but inside it as well?

Do you recognize those eternal fights between Sales and Operations departments that slow down your organization and can even affect the whole atmosphere in your company?

Sales:

• "We can't forecast. The market is simply not predictable."
• "We need flexibility. We need to sell these extras."
• "Service is what differentiates us."

Operations:

• "We can't build a plan on assumptions that shift every week."
• "Why does Sales always sell what we don't have?"
• "Every last-minute change reduces efficiency."

Both sides have a point: Sales is measured on revenue and growth, Operations is measured on efficiency, cost and reliability.

If there is no integrated plan, no shared assumptions and no explicit management trade-offs, the organization defaults to negotiation at operational level.

If those trade-offs are not made explicitly at leadership level, they will be made implicitly on the shop floor. Results: excess inventory, firefighting instead of planning, margin erosion, planners acting as mediators instead of decision-makers.

Sales & Operations Planning is about making deliberate choices at the right level: the amount of flexibility, the required service level, how to deal with constrained situations and how to manage overcapacity.

So, do you continue to allow Sales and Operations to compete? Or will you set them up for success?