Where Is OTIF Used? Common Locations and Processes in the Supply Chain

OTIF (On Time In Full) is a metric that lives wherever goods move, are stored, or are handed off between partners. Understanding the common locations and processes where OTIF is applied helps beginners see how it connects to real operations and where improvements can be made. This article walks through the major places OTIF is used and what it looks like in practice.

1. Warehouses and Distribution Centers (DCs)

Warehouses and DCs are primary locations where OTIF performance is directly affected. Here, OTIF depends on accurate picking, packing, and timely dispatch.

• Processes: Order picking, pack-out, staging, loading.
• Key risks to OTIF: Picking errors, missing inventory, packaging delays, and mis-scheduled loading.
• Example: A DC uses a warehouse management system (WMS) to ensure correct quantities are picked and scanned before loading. If goods are scanned and loaded outside the carrier’s pickup window, the order may fail the "on time" component.

2. Manufacturing and Assembly Plants

Manufacturers influence OTIF when they supply finished goods or components. Lead times, production schedules, and quality issues at plants can cause OTIF failures.

• Processes: Production scheduling, quality checks, packaging, outbound logistics.
• Key risks to OTIF: Production bottlenecks, quality rework, and insufficient finished goods for scheduled shipments.
• Example: A factory delay in finishing a seasonal product causes a supplier to ship partial orders late, resulting in OTIF penalties from the buyer.

3. Transportation and Carriers

Carriers — whether road, rail, air, or sea — play a central role in the "on time" part of OTIF. Transit performance, route planning, and carrier reliability are critical.

• Processes: Pickup, transit, last-mile delivery, proof of delivery capture.
• Key risks to OTIF: Transit delays, customs holds, incorrect routing, and missed delivery windows.
• Example: An express carrier misses scheduled delivery windows due to driver shortages, causing multiple customer deliveries to count as late in OTIF reporting.

4. Retail Receiving and Store Backrooms

Where the buyer or retailer receives goods — store backrooms or DCs — OTIF matters because the final acceptance determines whether an order is counted as delivered on time and in full.

• Processes: Receiving, QC checks, shelf replenishment, returns processing.
• Key risks to OTIF: Delays in offloading, discrepancies discovered on receipt, or incorrect documentation causing refusal or partial acceptance.
• Example: A store refuses a partial pallet due to damage, and the rejected quantity leads to an OTIF failure for the supplier.

5. International Logistics and Customs

For cross-border shipments, customs clearance, import documentation, and bonded warehouses influence OTIF due to added complexity and variability in timing.

• Processes: Customs declaration, duty payment, inspections, release to domestic transport.
• Key risks to OTIF: Incorrect paperwork, regulatory inspections, or delays in customs clearance.
• Example: A container held at customs for missing documents causes a shipment to miss the promised delivery window, impacting OTIF.

6. E-commerce Fulfillment and Last-Mile Delivery

In e-commerce, OTIF stretches from order confirmation to final customer delivery. The last-mile, including parcel carriers and local delivery services, is a frequent source of OTIF issues due to high variability.

• Processes: Order picking, packing, carrier handoff, last-mile routing, proof of delivery.
• Key risks to OTIF: Peak-period volumes, address errors, failed delivery attempts.
• Example: During seasonal peaks, limited driver capacity leads to late deliveries and reduced OTIF for an online retailer.

7. Cross-Dock and Consolidation Centers

Cross-docking and consolidation operations aim to reduce handling time. Proper synchronization is essential; any misalignment causes late or partial shipments.

• Processes: Direct transfers from inbound to outbound, consolidation of LTL shipments.
• Key risks to OTIF: Mismatched arrival times, missing SKUs, and insufficient staging space.
• Example: A consolidation center misses an inbound truck, delaying a consolidated outbound and impacting multiple customers’ OTIF.

Improving OTIF across locations

Improvements typically require cross-functional solutions: better forecasting and planning from procurement and demand teams, improved inventory accuracy and WMS processes in warehouses, clearer delivery windows and booking systems for carriers, and robust receiving procedures at customer sites. Technology such as WMS, TMS, and real-time tracking improves visibility and reduces data gaps that harm OTIF reporting.

Data and integration points

Wherever OTIF is used, integrating data across systems is key. Common integrations include:

• ERP ↔ WMS for order and inventory accuracy
• WMS ↔ TMS for dispatch and carrier handoffs
• TMS ↔ Carrier EDI for tracking and POD
• ERP ↔ Retailer portals for ASN (Advance Shipping Notices) and confirmations

Beginner tips

1. Map the flow of goods and identify the handoff points where OTIF can fail.
2. Improve data capture at each touchpoint — scanning, timestamps, and electronic documentation.
3. Start OTIF measurement in one location (e.g., a single DC) and scale as processes stabilize.

OTIF is not confined to one facility or department — it’s a cross-cutting measurement that reflects the combined performance of manufacturing, warehousing, transportation, and receiving. By understanding where OTIF is used and improving the handoffs between those places, organizations can raise service levels and reduce the hidden costs of poor delivery performance.