OTIF stands for On-Time In-Full! The OTIF metric works as a delivery performance indicator of your logistics/fleet. It checks two things first, it checks whether orders were delivered on time, without returns and investigate and secondly, checks whether the product arrived within the specifications provided to customers at the time of purchase.
But how will this performance indicator help me in my logistics business?
By calculating the on time in full, you can smartly measure your & customer’s satisfaction in the different phases such as:
- Delivery cycle
- Reducing costs
- Increase productivity
- Customer loyalty
If you want to calculate this performance indicator for your fleet or logistics, then below we have shared the most relevant details on the topic so that you understand more about the OTIF indicator and how it will help you to monitor the quality of your company’s deliveries.
What is the OTIF (On time in full) indicator?
OTIF is a tool that measures results and address problems. It is one of those metrics used to track goods deliveries.
Besides, this presents the two most important evaluation metrics for the perfect order cycle to be reached:
- On-Time: as the name says it all, it analyzes the delivery time;
- In Full: evaluates whether the product meets customer expectations created at the time of purchase (i.e. dimensions, quantities, quality, integrity).
Calculate OTIF To know your fleet operation
If you want to calculate OTIF to know your logistics operation performance; first of all, you need to gather order data from at least 6 months ago and organize it in two categories: fulfilled on time and delivered without error;
Always make sure that you have correct data as it brings two categories. And, each metric element should be checked individually to identify bottlenecks and operation problems.
Let’s make it more clear with an example;
Suppose that your company needs to deliver 1000 bowls to a restaurant:
- Delivery takes place on time, so On-Time was 100%;
- But, while travelling,105 bowls were damaged and arrived at the destination broken. Then, In Full of this delivery was 95%.
Therefore, the index of perfect products delivered to your customer, or the OTIF rate, was 90%.
To calculate the OTIF index for any demand, simply multiply one element by another and divide the result by 100 according to the following formula:
% OTIF =% On time x% On full / 100
Benefits of the OTIF indicator in my business?
If you want to get good rating & reviews then using the OTIF calculation method would be the ideal solution. The closer to 100% your indicator is, the closer to perfect delivery you are. Hence, this way you can increase your customers’ satisfaction and loyalty. Besides, it also reflected in the consumer’s view of your company.
You will get many advantages of using this performance indicator:
- You can easily measure points of failure
- Look for improvements scope
- Easily improve the quality of deliveries through the data obtained
- Smartly reduce feet costs generated by returns and breakdowns
How to use this formula in my fleet business?
You can easily implement this indicator into your fleet business to know customer satisfaction;
Here, we have shared some tips that can help in the progress of the deployment:
1. Standardize all logistical processes within your company and document all activities
2. Choose the ideal tool to manage deliveries
3. Record the steps correctly
4. Periodically analyze the data carefully
Month work in a few Hours
If you are having trouble handling all the tasks manually, then you should adopt a solution that carries the burden of your shoulders on his head. You should look for a solution that allows you to monitor the operation in real-time from the warehouse to the final consumer.
In this case, with manage Vehicle’s Fleet Management service you will have much more visibility of the operation.
Our tracking devices collect data in real-time and allow you to check whether the route taken corresponds to the planned route, when and where the driver made stops and whether deliveries or services were performed in the best way.
Now that you know what is OTIF and how this OTIF indicator can benefit your fleet and logistics, take the opportunity to check out other KPIs essential for your logistics operation.
Interested in implementing the method in your operation?
Call us and find out how Manage Vehicle’s fleet management system will help you improve the quality of your fleet’s service.
