Course contents
Advanced · Course 4: Approvals, OTIF and Supplier Scorecards · Lesson 2 of 4

Calculating a supplier's own on-time-in-full rate from real shipment records

Level: AdvancedTime: 50 minutesOrder used: Cedar & Co.'s own domestic reorders from Delta Garments, stock similar to Order A's own T-shirt rangeTool: Approvals and OTIF scorecard worksheet
For a domestic buyer who receives regular shipments but has never calculated a supplier's own real on-time-in-full rate from actual shipment records. No previous lesson is required. Figures are Cedar & Co.'s own illustrative example on its domestic reorders from Delta Garments.
BuyerCedar & Co., domestic, 60-day open account
SupplierDelta Garments, reorders similar to Order A's own range
Business modelMake to Stock
Shipments reviewed10 of Cedar & Co.'s own most recent reorders
Agreed delivery termsWithin 3 days of the agreed date, at least 95% of ordered quantity
This lesson calculatesThe supplier's own real OTIF rate from its actual shipment records
02Opening

This page explains how to calculate a supplier's own real on-time-in-full rate from actual shipment records, instead of judging reliability from memory

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.

03Before you start

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:

  • tell "on time" and "in full" apart as two separate conditions a shipment must both meet;
  • calculate a supplier's own OTIF rate from a real set of shipment records;
  • tell a supplier's own OTIF rate apart from its on-time delivery rate calculated alone;
  • recognize a short shipment as a failure of OTIF even when it arrives on the agreed date;
  • describe how a calculated OTIF rate feeds the scorecard built in lesson T27-C04-L03.

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.

04Key terms

Words you will meet in this lesson

TermMeaning
On-time delivery rateThe share of a supplier's past orders that arrived by their agreed date, used as a record of lead-time reliability.
OTIF rateThe share of a supplier's past shipments that were both on time and in full, calculated together, not as two separate figures.
In-full rateThe share of a supplier's past shipments that delivered at least the agreed minimum quantity of the order.
Short shipmentA shipment that arrives by its agreed date but delivers less than the agreed minimum quantity of the order.
Agreed delivery termsThe specific on-time window and minimum quantity two companies have agreed a shipment must meet to count as a success.
Shipment recordA single dated entry showing what quantity a supplier actually delivered against a specific order, and on what date.
05Teaching
The rule

A shipment only counts toward OTIF if it is both on time and in full; meeting only one condition still counts as a failure

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.

Cedar & Co.'s own agreed delivery terms with Delta Garments: within 3 days of the agreed date, at least 95% of ordered quantity
What you meet in real life

The same OTIF calculation applies across order types, but what counts as "on time" and "in full" can be set differently

What can differThe shapes you will meetWhy it matters
Domestic Make to Stock reorder on open accountCedar & 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 dateAn 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 linesA 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 agentMeridian 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.
The case we follow

Cedar & Co. calculates Delta Garments' own real OTIF rate from its last 10 reorders, instead of relying on a general impression

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.

Cedar & Co.'s own last 10 reorders from Delta GarmentsOn time and in full: 7 of 10 shipmentsOn time, but short shipment: 2 of 10 shipmentsLate, regardless of quantity: 1 of 10 shipments
Only 7 of Delta Garments' own last 10 reorders for Cedar & Co. were both on time and in full. The 2 short shipments and the 1 late shipment all fail OTIF, even though they might look acceptable if "usually pretty reliable" were left unchecked against the actual records.
The worked number

Calculating Delta Garments' own real OTIF rate from Cedar & Co.'s last 10 shipment records

Total shipments reviewed: 10
Shipments both on time and in full: 7
OTIF rate: 7 / 10 = 70%
On-time delivery rate alone, ignoring quantity: 9 / 10 = 90%

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.

On-time delivery rate against the stricter OTIF rateOn-time only90%OTIF70%
Delta Garments' own on-time delivery rate of 90% falls to a stricter 70% once quantity is checked as well. That 20-point gap is exactly what a buyer relying on arrival dates alone would miss.
The method

Five steps a buyer follows to calculate a supplier's own real OTIF rate

  1. Confirm the agreed delivery terms first: the on-time window in days and the minimum quantity percentage both sides have actually agreed to.
  2. Pull a real set of shipment records covering enough recent orders to be meaningful, not a single shipment or a memory of "the last one or two."
  3. Mark each shipment against both conditions separately: on time, yes or no; in full, yes or no.
  4. Count only the shipments that passed both conditions together as OTIF successes, then divide by the total shipments reviewed.
  5. Compare the calculated OTIF rate against an on-time-only rate to see how much a quantity shortfall is hiding behind an apparently good delivery record.
The trap

A common mistake is judging a supplier's reliability from its on-time delivery record alone, without checking whether each shipment also arrived in full

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.

06In plain words

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.

07Quick check
  • OTIF stands for on time and in full, checked together, not as two separate averaged scores.
  • A shipment that arrives on time but short of quantity is a short shipment, and it fails OTIF.
  • OTIF rate equals the number of shipments passing both conditions divided by the total shipments reviewed.
  • On-time delivery rate alone can look much higher than the true OTIF rate once quantity is checked.
  • Agreed delivery terms, the on-time window and the minimum quantity, must be confirmed before any OTIF figure is calculated.
  • A hybrid supplier's domestic and export shipments should be tracked in separate OTIF records, since their own agreed terms differ.
08Workplace scenario

Omar wants to place a larger reorder with Delta Garments based on its "usually pretty reliable" reputation, without checking the actual OTIF rate first

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.

Omar's note to his merchandiser. "Delta Garments has always come through for us. Let's just place the bigger reorder and not worry about the paperwork review this time."

Should Omar place the larger reorder without first calculating Delta Garments' own actual OTIF rate? Decide before opening the answer.

Show decision

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.

09What it costs

What an unchecked OTIF gap would likely cost Cedar & Co.'s next reorder, using this lesson's own illustrative figures

Planned next reorder, similar to Order A's own range: 5,000 pieces
Delta Garments' own real OTIF rate: 70%
Short shipments in the recent record: 2 of 10, both about 90% of ordered quantity
Likely shortfall on a 5,000-piece reorder, at the same 10% shortfall pattern: 5,000 × 0.10 = 500 pieces

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.

10Working template

Approvals and OTIF scorecard worksheet: calculate a supplier's own real OTIF rate

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)

Download the Approvals and OTIF scorecard worksheet (Excel)

11Check yourself

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?

12Glossary
ENARFRTRMeaning
On-time delivery rateمعدل التسليم في الموعدTaux de livraison à tempsZamanında teslimat oranıThe share of a supplier's past orders that arrived by their agreed date, used as a record of lead-time reliability.
OTIF rateمعدل OTIFTaux OTIFOTIF oranıThe share of a supplier's past shipments that were both on time and in full, calculated together, not as two separate figures.
In-full rateمعدل الكمية الكاملةTaux de livraison complèteEksiksiz teslimat oranıThe share of a supplier's past shipments that delivered at least the agreed minimum quantity of the order.
Short shipmentشحنة ناقصةLivraison incomplèteEksik sevkiyatA shipment that arrives by its agreed date but delivers less than the agreed minimum quantity of the order.
Agreed delivery termsشروط التسليم المتفق عليهاConditions de livraison convenuesKararlaştırılan teslimat koşullarıThe specific on-time window and minimum quantity two companies have agreed a shipment must meet to count as a success.
Shipment recordسجل الشحنةRegistre d'expéditionSevkiyat kaydıA single dated entry showing what quantity a supplier actually delivered against a specific order, and on what date.
13Next

Lesson 4.3: Building a supplier scorecard that predicts next season's risk, not just scores last season

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

14Ladder

RecognizeTell "on time" and "in full" apart as two separate conditions a shipment must both meet to pass OTIF.
ConnectSee how agreed delivery terms turn a set of real shipment records into a single comparable OTIF rate.
CompareWeigh a supplier's own on-time-only figure against its stricter, more complete OTIF rate.
DecideJudge whether a supplier's real OTIF rate, not its general reputation, justifies a larger reorder.