Supplier OTIF: what it is, how to calculate it and how to use it in vendor rating

What OTIF (on time in full) means

OTIF stands for on time in full: the share of deliveries that arrive by the agreed date and in the quantity ordered. A delivery only counts if it meets both conditions: one day late, or one piece short, and it is a missed delivery.

It can be counted per order line, where every item on every order is a case of its own, or per order, which is on time and in full only if all its lines are. A 10-line order with one incomplete line scores 90% by lines and 0% by orders. Supplier ratings usually count lines, because a problem on one item weighs on that item; OTIF per order is closer to how the receiving side experiences it, and is usually lower. What matters is picking one and not changing it from one month to the next. This guide counts by line.

What "on time" and "in full" mean

Both conditions look obvious until the first delivery needs classifying. These are the rules worth settling before you measure; the tolerances are examples, to be agreed with suppliers.

• Reference date: the date requested on the order measures the service the company needs, the date the supplier confirmed measures whether it keeps its word. Many companies track both and, for the confirmed date, use the first confirmation.
• Tolerance window: for example from two days early to zero days late. Early deliveries outside the window take up warehouse space and bring payment forward, and usually do not count as on time.
• Actual date: the date of goods receipt at the warehouse, not the date on the delivery note.
• Quantity tolerance: for example ±2%, or zero for items counted by the piece.
• Partial deliveries: what counts is the quantity that arrived within the window; a balance that arrives later does not make the line complete after the fact.
• Rejects at inspection: goods rejected at incoming inspection do not count as delivered. Use the accepted quantity.

Formula

Every line gets two flags, on time yes or no and in full yes or no. OTIF is the share of lines that carry both.

On time and in full show which condition fails more often, OTIF how many deliveries actually went right. Lines due in the period that have not arrived yet belong in the denominator as misses: otherwise a supplier that does not deliver at all looks better than one that delivers late.

Example: one month, one supplier

In one month a supplier delivered 400 order lines: 352 on time, 368 in full and 336 both on time and in full. These are example figures, not a customer's.

64 lines were missed: 48 late and 32 incomplete, 16 of them both (48 + 32 − 16 = 64). The supplier's main problem is punctuality, which costs 12 points, more than completeness, which costs 8.

Why on time × in full is not OTIF

When line-level data is missing, it is tempting to multiply the two percentages: 88% × 92% = 81.0%. The true OTIF in the example is 84.0%, so the multiplication is off by 3 points.

The product would only be right if late and short deliveries were independent. They usually are not: a supplier that runs out of stock tends to ship late and short at the same time, so problems cluster on the same lines. In the example 16 lines have both faults; if they were independent there would be about 4 (12% × 8% × 400 = 3.84).

With on time at 88% and in full at 92%, OTIF could be anywhere between 80.0%, if no line has both faults (352 + 368 − 400 = 320 lines), and 88.0%, if every incomplete line is also late. You need the count on the same line, which is what the calculator asks for.

OTIF toward customers and from suppliers

Measured on deliveries to your own customers, OTIF is the company's service level and is calculated on the date the customer requested. Measured on deliveries received, it is supplier OTIF, which feeds vendor rating and negotiations. Some large retail chains tie contractual penalties to it: in that case the definition written in the contract is the one that applies.

The two sides are linked. An unreliable supplier forces you to hold more safety stock, which is one reason to read stock coverage together with purchasing OTIF. Toward the customer the carrier matters too: if goods leave on time but arrive late, OTIF drops all the same, as in the delivery times and carrier punctuality use case.

Vendor rating: OTIF in a supplier scorecard

OTIF tells you whether a supplier delivers as promised, not whether the goods are good or the price is right. Vendor rating combines several criteria into one score: each is brought onto a 0 to 100 scale, multiplied by its weight and added up. The weights and measures below are an example.

With example bands such as A from 90 up, B from 75 to 90 and C below 75, the supplier is a B. Of the 11.2 points short of 100, 6.4 come from OTIF (16 points × 40%): that is the criterion to work on. If rejects at inspection already make a line incomplete, quality counts the same problem twice: that can be acceptable, but it is better decided and written down.

How to use it with suppliers

OTIF is useful once it becomes a regular conversation, on the same numbers on both sides:

• Shared definition: dates, tolerances, partial deliveries and rejects go into the supply agreement before anything is measured.
• Monthly review: OTIF, on time and in full, with the list of missed lines the supplier can check one by one.
• Three to six month trend: a bad month happens, three months of decline are a signal, and they show when the supplier started to slip.
• Top causes: missed lines are classified by reason (goods unavailable, transport, order error, reject) and the top two or three usually explain most of the problem.
• Target and plan: an agreed threshold per supplier or product family and, for those below it, actions with dates.

There is no universally good value: it depends on the industry, the tolerances and the counting unit. To compare different suppliers the rules must be the same; to judge one supplier, the trend matters most.

Common mistakes

• Changing dates after the fact: if the requested date is overwritten with the new one the supplier proposes, delays agreed at the last minute disappear.
• Measuring on the confirmed date only: a supplier that keeps moving its confirmation always looks punctual.
• Mixing lines and orders: the two OTIFs cannot be compared, neither across suppliers nor from one month to the next.
• Multiplying on time by in full: in the example it gives 81.0% instead of 84.0%.
• Trusting raw data: a few impossible dates, negative quantities or orders without a requested date are enough to turn the discussion to the data rather than the supplier.

The data usually comes from three places: purchase order lines from the ERP, goods receipts from the warehouse and the supplier master, often in Excel. In Muvia, orders and receipts are copied every night, Data Checks set aside the impossible rows and say how many there are, a step-built query marks each delivery as on time, in full or both, and a dashboard lines up suppliers with their trend; every month purchasing receives the PDF report. That is the supplier punctuality and OTIF use case.

Calculator

Enter the order lines delivered and how many arrived on time, in full or both: the calculator returns on time, in full and OTIF. The starting values are those from the example.