|This article does not cite any sources. (December 2009)|
DIFOT (Delivered In-Full, On-Time) or OTIF (On-Time In-Full) is a measurement of delivery performance in a supply chain. Some consider it superior to other delivery performance indicators, such as shipped-on-time (SOT) and on-time performance (OTP), because it looks at deliveries from the point of view of the customer. It measures how often the customer gets what they want at the time they want it.
OTIF (On Time In Full), or DIFOT (Delivered In Full On Time), is one of the crucial measurements of logistics performance.
It measures if the Supply Chain was able to deliver: the expected product (reference and quality) in the quantity ordered by the customer at the place agreed by the customer at the time expected by the customer (in most of the cases, with a tolerance defined with the customer)
This KPI has the advantage to measure the performance of the whole logistic organization and this, to meet the customer service expectations. To reach a good OTIF level, all the functions of the supply chain (among which orders taking, procurement, suppliers, warehouses, transport...) have to work at their best level. The main contribution of OTIF is to allow to see at a glance how the company delivers its customers.
Generally OTIF is calculated by taking into account the number of deliveries:
OTIF ( % ) = number of deliveries OTIF ÷ total number of deliveries * 100
But it can also, according to organizations, be calculated according to the number of orders or the number of the order lines.
Requirements for the OTIF measurement are : have a delivery date (even hour for some organizations) on the customer order, measure the date or the hour of delivery and archive it in the system, maintain record of the reasons why an order was not OTIF.
If the orders are split at the customer request, then each delivery line is considered.
Companies which have set up a measure of the OTIF are unanimous to recognize its value. They quote among other positive aspects : the increase of the operating profit due to the reduction of operating expenses (in relation with the non-quality reduction, better inventory control, better customer orders taking, higher reliability in storage and transport...) and the increase of sales (due to a better product availability for sales).
The OTIF notion was extended to DIFOTAI (Delivery In Full On Time Accurately Invoiced) which also takes into account the quality of the invoicing.