On-Time and In-Full Monitoring with SAP Business ByDesign
On-time and in-full (OTIF) is a very simple measure of whether the organisation’s supply chain was able to deliver to the customer what they ordered, how much they ordered, when and where they wanted it.
This is the core function of the supply chain and directly impacts customer satisfaction which is why it is such an important key performance measurement for this type of business.
As an example, in the retail sector typical targets are an OTIF > 97% which demonstrates how important it is to be continuously monitoring this figure, especially in the run up to and during seasonal peaks.
The calculation of your business’ OTIF score is very simple at face value:
However, as is always the case there will be variations on what is considered an OTIF delivery across different organisations. For some it will be based on the actual delivery date and time that the customer takes physical possession of the goods, whereas for other companies it will be based on the dispatch date and time. In addition, depending on the nature of the business or service provided, you could be measuring OTIF based on the exact minute of the delivery.
Measuring OTIF in SAP Business ByDesign
There are some useful analytical reports and KPI dashboard figures, pre-built by SAP, available in SAP Business ByDesign to assist you with tracking this important measurement. The KPI values can be tracked on your launchpad or work centre overview screens, allowing you to have up to date instant knowledge of your supply chain performance:
These quick figures allow you to see the trend of your OTIF metric as a simple percentage figure and a small graphic showing the previous four weeks. By simply clicking on the relevant KPI you can then drill into it to further understand what is driving the figures, for example it may only be one product line that is causing the drop in performance, so you can take the necessary action to resolve the issue:
The standard delivery performance reports give you the ability to view the overall performance by week and then drill right down into the individual sales order or items or even the OTIF performance by customer:
Improving your OTIF Performance
If you are not happy with your OTIF metric, then by using SAP Business ByDesign you are already on the road to improvement! One of the most commonly recommended methods of improving OTIF is to use a real-time system to monitor it. This allows you to deal with any problems as soon as they arise, preventing them from snowballing into something much, much worse.
SAP Business ByDesign KPIs can be configured to automatically refresh automatically every hour so you can have a dashboard visible to your team helping them to understand their performance. Whenever you run the KPI or analyse it further to dive into the date, you can be rest assured that the data you are viewing is live and so 100% accurate and up to date. This also means that you can track in real-time any measures put in to see their effect on supply chain performance.
Alongside this, you can use the inbuilt supply planning and demand forecasting features to better plan your supply, whether it be procurement or production, to ensure you have the products ready for despatch to your customers when required. The supply planning runs on real-time demand data from sales orders and the demand forecasting can take advantage of statistical forecasting models to predict demand based on your sales history.
Other areas to look at for improving OTIF are:
Validate master data such as:
Transport lead times
Procurement lead times, if you need to purchase in stock
Production lead times, if you are manufacturing
Safety stock or reorder point levels
Enable ATP checks to ensure the sales team can visually see if the order requirements can be met – therefore setting customer expectations up front
If you have multiple warehouses, check whether source of supply rules are correctly prioritising them
If you can update the delivery times in the outbound delivery to match the actual delivery dates and times you can then analyse whether your transport providers are the cause of delays rather than late shipments leaving your warehouses
If you would like to talk to us further about achieving OTIF and how we can help then please call or
Lucy is an experienced BBC journalist and writer now creating business content as part of an integrated approach to digital marketing. If you would like to be interviewed for this blog then please get in touch [email protected]