What is the OTIF index, and how to calculate it in production?
OTIF stands for On-Time In-Full. The On-Time In-Full (OTIF) indicator is one of the most critical tools for assessing the efficiency of product or service delivery. It is vital in the manufacturing industry, as it helps determine the extent to which suppliers are meeting their commitments regarding the timely and complete fulfillment of orders. This indicator measures whether products or services are delivered on time and in their entirety to customers.
Table of Contents:
- What is the OTIF indicator?
- How to calculate the OTIF indicator?
- Do you want to improve your OTIF?
- Why is the OTIF indicator important?
- Why is it important to monitor the On-Time-In-Full indicator?
- Correlation between the OTIF indicator and OEE
- What is not an OTIF indicator?
What is the OTIF indicator?
The OTIF indicator is a percentage-based KPI that measures the reliability of suppliers or internal teams in delivering customer orders on time and in full. It helps assess operational performance and uncover potential gaps in planning, production, logistics, or supply chain coordination.
How to calculate the OTIF indicator?
To calculate the OTIF indicator, consider the number of orders delivered on time and in full. Divide this by the total number of orders. The result, multiplied by 100%, gives the OTIF score.
The formula is as follows:
OTIF = (Number of orders delivered on time and in full) / (Total number of orders) * 100%.
Example: if 90 orders were delivered on time and in full during the month, and the total number of orders was 100, the OTIF rate is 90% (90 / 100) × 100% = 90%
Do you want to improve your OTIF?
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Why is the OTIF indicator important?
The OTIF indicator is important because it helps assess how effectively a company fulfills its customer commitments. A high OTIF score indicates that deliveries are complete and on time, which significantly contributes to customer satisfaction and strengthens the company’s reputation.
Why is it important to monitor the On-Time-In-Full indicator?
Monitoring OTIF is essential for understanding the current state of production performance. This KPI provides insight into how well the company is meeting its commitments to customers. A high OTIF value indicates that deliveries are both timely and of good quality, ultimately enhancing customer satisfaction and reinforcing brand trust.
Tracking this KPI also allows a company to identify issues and areas for improvement within production and logistics processes. A low OTIF score may indicate problems with planning or organization, suggesting the need for operational reviews and adjustments to enhance overall results.
Monitoring OTIF also helps track progress and measure goal achievement, enabling decisions that support process optimization. OTIF is also important for customers, as it provides insights into the quality and reliability of deliveries from their suppliers.
It is worth noting that effective use of the OTIF metric requires continuous attention and a strong understanding of production and logistics processes. This knowledge is essential for calculating OTIF correctly and interpreting the results meaningfully.
A company that understands OTIF can use the metric not only to monitor performance but also to identify and resolve underlying production or delivery issues. A low OTIF score may indicate weaknesses in planning or production management, necessitating a thorough analysis of the situation and the implementation of corrective actions.
Correlation between the OTIF indicator and OEE
There is a direct correlation between OTIF and OEE, the Overall Equipment Effectiveness indicator, which evaluates how efficiently production equipment and lines are utilized. A high OEE indicates that production lines are running efficiently and effectively, which supports the ability to fulfill customer orders completely and on time, ultimately leading to a high OTIF indicator.
Conversely, a low OTIF score may indicate planning or logistics issues that negatively impact production efficiency and reduce the OEE value. The two indicators complement each other and together help evaluate the performance of production and logistics operations.
The correlation between OTIF and OEE means that the performance of one often reflects the condition of the other, allowing for a complete and accurate assessment of the operational efficiency of manufacturing and delivery processes.
What is not an OTIF indicator?
The OTIF index is not an indicator that measures:
- Product quality: The indicator in question focuses on the timeliness and completeness of delivery, rather than the quality of the product itself.
- Production efficiency: The OTIF indicator does not account for the impact of production line efficiency on the on-time and fullness of delivery. To assess production efficiency, it is necessary to consider other indicators, such as Overall Equipment Effectiveness (OEE).
- Production profitability: The On-Time and Full Delivery Index does not account for production costs and therefore does not facilitate an assessment of production profitability.
- Customer Satisfaction: because it only takes into account on-time and complete delivery, not customer satisfaction with product quality and service.
In summary, On-Time In-Full is not an indicator that measures product quality, production efficiency, production profitability, or customer satisfaction. It is just one of many indicators that are used to monitor the efficiency of manufacturing and logistics processes.
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