Blog · SCM for Manufacturers
Why sales and logistics argue about OTIF, and how to end it.
Transport says OTIF is 96. Sales says 81. Same month, different spreadsheets. Neither side is lying, and that is exactly the problem.
Both numbers are usually defensible
The monthly review where logistics and sales present different OTIF figures is one of the most common meetings in manufacturing. It is also one of the least useful. Each side has a number it can defend, and the first half hour goes to arguing about which number is real, not about what to do.
The gap almost never comes from bad arithmetic. It comes from different choices that nobody wrote down.
| Choice | How logistics often counts | How sales often counts |
|---|---|---|
| Unit | Trips or trucks | Order lines or units |
| On time against | Transit time from dispatch | The date promised to the customer |
| Clock starts | Gate-out | Order or indent |
| In full | Truck delivered what was loaded | Customer received what was ordered |
| Damage | A separate claims topic | Not in full |
Change any one of those and the number moves several points. Change all five and a 96 becomes an 81 without anyone doing anything wrong.
It is a definition problem that looks like a performance problem
The argument persists because each definition suits the team that chose it. Counting from gate-out keeps placement delays out of transport's number. Counting order lines makes a single missing SKU look like a failed delivery. People are not gaming the figure; they are measuring the part of the chain they control.
The cost is that nobody owns the gap. When a late placement, a slow gate and a slow carrier together make a delivery late, each team's number looks fine and the customer's does not. For the formulas themselves, see our guide on OTIF vs fill rate vs DIFOT; this post is about why agreeing on one matters more than which one you pick.
Write one definition down, and compute it in one place
In SCM for Manufacturers OTIF has a single written definition: units delivered within the lane standard plus 10% and with zero damage, divided by units dispatched, with a target of 95% or more. It sits in a dictionary of ten KPIs, each with one definition and one target, computed the same way for the company, the 3PL and the carrier. You may choose a different definition. What matters is that there is one, that it is written, and that every team reads the same computed number instead of building its own.
Two further rules take the heat out of the review:
- On-time verdicts follow written rules. Arrival is compared with the promised date in whole calendar days: on time, delay at one day, super delay at two or more. A disputed trip replays with its sources.
- Every late trip has an owner. Each delay is attributed to shipper, customer or carrier with a reason; a type without a reason still counts as pending. Those attributions feed the carrier scorecard.
Attribution is what turns a number into a conversation
Once the definition is agreed, the more useful question is not "what is our OTIF" but "whose misses are these". If most late deliveries trace back to placement or dock time inside the plant, pressing carriers will not help. If they trace to one carrier on two lanes, a plant improvement project will not help either. A single OTIF with delay owners attached tells each team which part of the gap is theirs.
What we would do before the next review
- Put both current OTIF calculations side by side and list every choice that differs.
- Agree one definition, including what counts as damage and which date is the promise.
- Compute it once, from gate, GPS and POD events rather than self-reporting.
- Require an owner and a reason for every late trip before the review.
- Open the review with misses by owner, not with the headline number.
More on measurement in the SCM for Manufacturers guides.
Questions
Why do sales and logistics report different OTIF numbers?
They usually count different units, measure on-time against different dates, start the clock at different points and treat damage differently. Each choice is defensible, so the numbers diverge without anyone being wrong.
Which OTIF definition is correct?
There is no single correct one. What matters is that one definition is written down, agreed, and computed in one place for every team and carrier.
How do we make OTIF reviews more useful?
Attribute every late trip to an owner with a reason, and start the review with misses by owner rather than the headline percentage.
See it on your own data. SCM for Manufacturers puts the plant gate, carriers, RDC stock, cold chain and OTIF on one control tower. Book a 30-minute working session with an engineer.