OTIF Explained: Definition, History, and How to Calculate It

You’ve double-checked the inventory, the warehouse team confirmed the pick-and-pack was clean, and the shipment went out on time... yet the customer still calls upset — either their order was late, incomplete, or both.

Sound familiar?

If you've ever been caught in that gap between “we shipped it” and “the customer got exactly what they expected,” you're not alone. That gap is exactly what OTIF is meant to measure — and fix.

In this guide, we’ll break down what OTIF actually means, how it’s calculated, and what you can do to improve it.

What is OTIF or On-Time In-Full?

OTIF (On-Time In-Full) is a supply chain KPI that measures a supplier’s ability to deliver exactly what was ordered — on time, in the correct quantity, and to the right location.

It reflects how reliably a business can meet its delivery commitments... without errors, delays, or missing items.

Where Did OTIF Come From?

OTIF wasn’t just a random metric — it was formalized by Walmart in 2017 to improve shelf availability and hold suppliers accountable for delivery performance.

The goal was simple: make sure products are always available when and where customers need them.

Walmart's founder, Sam Walton, once said, “There is only one boss — the customer.” OTIF became a way to live that philosophy through data. And with penalties for non-compliance, suppliers had to take it seriously.

Put simply...

OTIF means the customer gets what they ordered, in the amount they requested, delivered to the right place, and at the right time.

If even one part goes wrong — late shipment, wrong item, missing quantity — the delivery fails OTIF.

This metric isn't just about tracking performance... it's about protecting customer trust and reducing waste across the supply chain.

How is OTIF Calculated?

OTIF is calculated as a percentage that shows how often you delivered exactly what was ordered, at the right time, and in the correct quantity.

Formula

OTIF (%) = (Orders Delivered On Time and In Full / Total Orders) × 100

Let’s say you shipped 1,200 orders last month, and only 925 were delivered both on time and in full…

OTIF = (925 / 1,200) × 100 = 77.08%

That means just over 77% of your orders met both criteria. Sounds simple — but there’s more under the hood.

What Are Common OTIF Failures?

Earlier, we mentioned that OTIF sounds simple on paper — and here, we're going to talk about why that is.

Inaccurate Demand Forecasting

If you can’t forecast accurately, you can’t deliver reliably.

When demand projections miss the mark, stock either runs out too quickly or ends up sitting idle — both situations disrupt your ability to fulfill orders in full.

These problems often stem from outdated sales data, disconnected planning systems, or weak communication between departments.

Many businesses also miss the impact of seasonality, promotions, or shifting customer behavior... which leaves the supply chain unprepared.

The result? Delays, shortages, and missed delivery targets that quietly eat away at your OTIF score.

Inefficient Warehouse Operations

The warehouse is where OTIF gets built — or broken. When inventory is hard to locate, pickers are overwhelmed, or fulfillment processes lack structure, small errors quickly multiply.

Mispicks, incomplete shipments, and outbound delays don’t just slow down operations... they show up as missed deliveries or partial orders on the customer’s end.

A cluttered layout, lack of staff training, or outdated workflows can all be part of the issue.

Getting this right means making sure people, tools, and systems are working in sync — not just moving boxes, but moving them right.

Transportation Delays

Even a perfect order means nothing if it shows up late. Transportation failures are one of the most common OTIF setbacks — and often the hardest to control.

Poor coordination between warehouses and carriers, unexpected traffic or weather issues, or zero visibility on shipment status can all cause delays that push deliveries outside the promised window.

Without live tracking or aligned logistics handoffs, you're reacting after the fact... which is often too late.

Improving OTIF at this stage requires more than hoping the truck shows up — it takes communication, accountability, and real-time visibility.

Takeaway?

Every OTIF failure is rooted in something preventable — a bad forecast, a broken process, or a delayed truck. The clearer you see these patterns, the faster you can fix them... and the better your supply chain performs.

How to Improve Your OTIF Rate

If your OTIF rate has been falling short — and you’re not sure where to start — this section breaks down the areas that have the biggest impact. These are the steps teams focus on when they want to stop missing deliveries and start hitting targets consistently.

Enhance Demand Forecasting

Forecasting is the front line of OTIF performance.

When you misread demand, inventory either runs too thin or clogs up valuable space... both of which make full, on-time deliveries harder to hit. The fix? Use up-to-date sales data.

Factor in trends, promotions, seasonality — and make sure your supply chain teams and sales teams are looking at the same numbers.

The clearer the picture of demand, the more accurate your supply plans — and the better your OTIF rate holds up.

Looking to track fulfillment performance more accurately? Our reports and analytics tools help you identify patterns, spot delivery issues, and make informed decisions faster.

Streamline Warehouse Operations

Your warehouse is more than just storage — it’s the engine room for fulfilling promises.

Sloppy layout, unclear workflows, or manual pick-and-pack processes lead to delays, mistakes, and short shipments. Even one missed item can throw off your OTIF score. Tighten your layout.

Train your team. Use a proper WMS if you can. The smoother your operations, the fewer slips between order and dispatch.

If you're connecting warehouse workflows to your delivery ecosystem, our integration tools help bridge your systems — from OMS to carriers — for smoother handoffs and better visibility.

Optimize Transportation Management

You can do everything right inside the warehouse… and still miss OTIF because of what happens outside it. Carrier issues, scheduling gaps, lack of visibility — they all impact timeliness.

Partner with reliable carriers, plan ahead with buffer windows, and use real-time tracking to monitor and fix delays before they snowball.

When logistics is reactive, OTIF drops. But when it’s proactive… performance improves fast.

Our carrier management and last-mile intelligence tools give you full control and transparency across your shipping network, so nothing gets lost in the dark.

Work Closely With Your Suppliers

Suppliers aren’t just vendors — they’re part of your OTIF equation. If their lead times shift, your timelines slip.

If they miss packing specs, your orders don’t go out cleanly.

Make collaboration a habit. Share your forecasts. Stay aligned on timing. And keep communication open, so surprises don’t turn into missed shipments.

For teams managing complex networks, our tailored solutions for 3PLs, retail, and enterprise logistics help streamline workflows across partners.

Monitor, Measure, Improve

You can’t fix what you don’t track.

Monitor your OTIF rate regularly — not just as a score, but as a signal. Dig into misses. Look for patterns. Was it a warehouse issue? A supplier delay? A transport problem? Every dip is a data point.

Over time, spotting those trends lets you tighten up the whole supply chain — one small fix at a time.

Our shipping automation and customer experience tools work together to reduce friction, boost visibility, and help you stay ahead of missed expectations.

Final Thoughts

Improving OTIF is more than just chasing a metric — it’s about building a supply chain that delivers consistently and keeps customers happy.

At Carriyo, we help businesses simplify shipping, manage carriers more effectively, and improve the post-purchase experience.

Explore how our shipping automation, carrier management, and customer experience tools can support your OTIF goals. We also offer tailored solutions for retailers, eCommerce brands, 3PLs, enterprises, and small businesses.

Looking to learn more? Visit our blog for insights or reach out to our team — we’d love to help.

FAQs

What is a good OTIF benchmark?

Most businesses aim for 95% or higher. In retail and CPG, targets can go up to 98–100%, especially when penalties or service-level expectations are in place.

What’s the difference between OTIF and DIFOT?

Both track delivery accuracy and timing. OTIF is more commonly used in North America, while DIFOT is more common elsewhere. The core idea is the same.

Who’s responsible for OTIF performance?

Primarily the supplier, though 3PLs and internal teams play key roles. OTIF success usually depends on everyone in the chain being aligned.

Does OTIF apply to eCommerce or DTC?

Yes. Even for eCommerce, OTIF can be used to measure how reliably you fulfill customer orders on time and without errors.

What happens if you miss OTIF targets?

You may face penalties, chargebacks, or lower supplier scores — especially when working with big-box retailers.