This page is for a domestic buyer who already receives regular shipments from a supplier but has never turned a real set of shipment records into a single, calculated on-time-in-full rate. At work, a buyer who judges a supplier's reliability from a general impression, "they're usually pretty good," has no way of knowing whether that impression still matches the supplier's own recent record until a shipment arrives late or short. This lesson mainly teaches the information flow: it shows how to calculate a supplier's own real on-time-in-full rate, OTIF for short, from its actual shipment records.
Cedar & Co. reorders T-shirt stock from Delta Garments every few weeks, on 60-day open account, similar in construction to Order A's own range. Omar, the owner of Cedar & Co., has described Delta Garments as "usually pretty reliable" for over a year. Neither Omar nor his merchandiser has calculated an actual OTIF rate from the shipment records both companies already keep.
You need: no previous lesson from this track, though the habit of naming a status precisely, from lesson T27-C04-L01, carries over into how an OTIF rate is read.
By the end of this lesson you can:
Not covered here: tracking every approval an order needs before production starts, covered in lesson T27-C04-L01, and building a scorecard that predicts next season's risk, covered in lesson T27-C04-L03.
| Term | Meaning |
|---|---|
| On-time delivery rate | The share of a supplier's past orders that arrived by their agreed date, used as a record of lead-time reliability. |
| OTIF rate | The share of a supplier's past shipments that were both on time and in full, calculated together, not as two separate figures. |
| In-full rate | The share of a supplier's past shipments that delivered at least the agreed minimum quantity of the order. |
| Short shipment | A shipment that arrives by its agreed date but delivers less than the agreed minimum quantity of the order. |
| Agreed delivery terms | The specific on-time window and minimum quantity two companies have agreed a shipment must meet to count as a success. |
| Shipment record | A single dated entry showing what quantity a supplier actually delivered against a specific order, and on what date. |
The general rule is that OTIF, on-time-in-full, is not an average of two separate scores; it is a single pass-or-fail test that a shipment must meet on both conditions at once. A shipment that arrives on the agreed date but short of the agreed minimum quantity fails OTIF, exactly as a shipment that arrives in full but late also fails it. Calculating OTIF means counting, from real shipment records, how many shipments passed both conditions together, divided by the total number of shipments reviewed.
| What can differ | The shapes you will meet | Why it matters |
|---|---|---|
| Domestic Make to Stock reorder on open account | Cedar & Co.'s own agreed terms allow a 3-day window and require at least 95% of ordered quantity, reflecting an ongoing relationship rather than a single fixed contract. | A domestic reorder's own terms can be renegotiated between two parties who deal regularly, unlike a one-off export contract. |
| Export Make to Order with a fixed shipment date | An order for Northline Apparel treats its own fixed sailing date as the on-time boundary with effectively no tolerance window, since a missed sailing cannot be recovered by a later vessel on the same terms. | A fixed sailing date makes "on time" a hard line rather than a negotiable window, raising the cost of even a small delay. |
| Hybrid supplier running domestic and export orders on the same lines | A factory calculating its own OTIF rate needs to keep domestic and export shipments in separate records, since their own agreed terms for "on time" and "in full" genuinely differ. | Blending domestic and export shipment records into one OTIF figure hides which market's own terms are actually being missed. |
| Order placed through an agent | Meridian Sourcing, tracking shipments on behalf of a European buyer, records the date goods actually leave the factory separately from the date they clear at the buyer's own port, since only one of those dates matches the agreed OTIF terms. | Using the wrong date, factory departure instead of the agreed measurement point, can make a genuinely late shipment look on time. |
Omar asks his merchandiser to pull Delta Garments' own shipment records for Cedar & Co.'s last 10 reorders and check each one against the agreed terms: delivery within 3 days of the agreed date, and at least 95% of ordered quantity.
Delta Garments' own real OTIF rate works out to 70%, well below the 90% figure that counting on-time delivery alone would suggest, because 2 of the 9 "on time" shipments were actually short shipments that fail OTIF on the quantity condition. Omar's general impression of "usually pretty reliable" was built from a rough sense of arrival dates, not from a figure that also checked quantity.
A common mistake is a buyer treating "arrived on time" as the whole reliability story, checking dates against a delivery calendar while never confirming that the quantity received actually matched what was ordered. The mistake persists because a short shipment that arrives on schedule looks, at a glance, like a success, and only a quantity check against the original order reveals it was not. What this costs is real: if Cedar & Co. keeps restocking assumptions on Delta Garments' own 90% on-time figure rather than its actual 70% OTIF rate, shelves run short more often than the buyer's own planning expects, and the gap is never explained by a delivery date that, on its own, always looked fine.
A shipment only really succeeds if it arrives on the agreed date and delivers the agreed quantity, both at once, not one or the other. Checking dates alone can make a supplier look far more reliable than it actually is, because a shipment that shows up on time but short of quantity still fails the buyer in a way a delivery calendar alone will never show. Calculating a real OTIF rate means counting, from actual shipment records, how many shipments passed both tests together, and comparing that stricter figure honestly against a general impression built from memory or from on-time dates alone.
Cedar & Co. is planning to increase its next reorder by 40% to cover a busier season. Omar's default assumption, based on over a year of dealing with Delta Garments, is that the supplier is "usually pretty reliable," and he is ready to place the larger order without reviewing the shipment records first.
Should Omar place the larger reorder without first calculating Delta Garments' own actual OTIF rate? Decide before opening the answer.
No, not without calculating the real OTIF rate first. A general reputation built over a year can be well out of date with the supplier's own recent, actual performance.
First, Delta Garments' own last 10 shipments show a real OTIF rate of 70%, not the 90% on-time-only figure Omar's impression is closer to, because 2 shipments arrived on time but short of quantity.
Second, a 40% larger reorder makes any existing shortfall pattern worse in absolute pieces, since a supplier already short-shipping 2 orders in 10 will likely short-ship a larger order by a larger number of pieces, not just the same percentage.
Omar should review the actual OTIF rate before increasing order size, and if it is genuinely below what a busier season needs, discuss the shortfall pattern with Delta Garments directly rather than assuming a year-old reputation still holds.
If Delta Garments' own recent short-shipment pattern repeats on Cedar & Co.'s next 5,000-piece reorder, the shop could receive around 500 pieces fewer than ordered, a shortfall invisible to anyone checking only whether the shipment arrived on the agreed date. Calculating the real OTIF rate before the order is placed is what turns that risk into a number Cedar & Co. can plan around, rather than a surprise discovered at the stockroom door.
Open the course workbook's "OTIF rate" sheet. Enter each shipment's agreed date, actual date, ordered quantity and delivered quantity; the sheet marks each shipment on time or late, in full or short, and calculates the overall OTIF rate with a live formula.
[Download the Approvals and OTIF scorecard worksheet](../../templates/T27-C04-approvals-and-otif-scorecard-worksheet.xlsx)
1. A supplier delivers 8 of 12 shipments on time and in full. Of the remaining 4, 2 arrive late and 2 arrive on time but short of quantity. What is the supplier's own OTIF rate?
2. A buyer has judged a supplier as reliable based only on its on-time delivery rate for two years. What is the most likely risk of never checking the OTIF rate as well?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| On-time delivery rate | معدل التسليم في الموعد | Taux de livraison à temps | Zamanında teslimat oranı | The share of a supplier's past orders that arrived by their agreed date, used as a record of lead-time reliability. |
| OTIF rate | معدل OTIF | Taux OTIF | OTIF oranı | The share of a supplier's past shipments that were both on time and in full, calculated together, not as two separate figures. |
| In-full rate | معدل الكمية الكاملة | Taux de livraison complète | Eksiksiz teslimat oranı | The share of a supplier's past shipments that delivered at least the agreed minimum quantity of the order. |
| Short shipment | شحنة ناقصة | Livraison incomplète | Eksik sevkiyat | A shipment that arrives by its agreed date but delivers less than the agreed minimum quantity of the order. |
| Agreed delivery terms | شروط التسليم المتفق عليها | Conditions de livraison convenues | Kararlaştırılan teslimat koşulları | The specific on-time window and minimum quantity two companies have agreed a shipment must meet to count as a success. |
| Shipment record | سجل الشحنة | Registre d'expédition | Sevkiyat kaydı | A single dated entry showing what quantity a supplier actually delivered against a specific order, and on what date. |
You now know how to calculate a supplier's own real OTIF rate from actual shipment records. The next lesson shows how to turn that rate, and other real figures, into a scorecard that predicts risk instead of only describing the past. Back to the course map