Loading Dock

How To Stay Ahead of On-Time In-Full (OTIF) Fines

A break down of the whys behind On Time In Full (OTIF) fines and how to avoid them.
by Evan GLICK 08/09/2021
Post contents

Part of fully understanding the supply chain delivery performance metric On-Time In-Full (OTIF) — and ultimately avoiding any unnecessary fines — is first understanding the “whys” behind it.

For example, if product is shipped too early, retailers often become concerned about extra touches which can lead to damages. It also means store associates have to spend more time managing inventory rather than assisting customers. It’s even quite possible that product will be lost in the shuffle due to the constant influx of other shipments.

On the other hand, if product is shipped too late, it won’t make it to the shelves in time. And when product is out of stock, it’s easier for a retailer’s customers to simply shop from Amazon rather than taking the time to make a trip to a brick and mortar store.

All the while DC staffs are struggling hard, incentivizing dropping trailers and disincentivizing live unloading, which results in trucks getting delayed. This makes it more difficult to hit other appointments on time.

Therefore, it’s important to firmly understand OTIF guidelines to avoid fines, while maximizing efficiency to get trucks back on the road to ensure hitting all appointment times across the board.

As capacity continues to tighten with ongoing labor shortages, retailers are creating more stringent OTIF guidelines. We highlighted the challenges of shipping into Big-Box retailers in our previous blog, which includes many of the OTIF requirements for each.

However, knowing what the challenges are and staying ahead of them are two separate things. One of the most important measures you can take is to be vigilant about what Big-Box retailers are publishing concerning their constantly updated OTIF requirements. Sometimes you just have to know where to look to find these changes.

Steps for staying ahead of OTIF

Following are some key ways that you can stay ahead of ever-changing OTIF requirements and how fines are handled:

  1. Keep current on Big-Box retailer communications (we’ve learned all too well that they’re constantly updating). Key communications to look for are publications and updates to requirements.

 

  1. Each retailer has a “routing guide” that is continuously updated and holds the keys for maintaining a perfect shipment. When working with a retailer, you should be equipped with a portal log-in to the supplier network. The portals allow you to go into the system and find information such as on-time rate, fill rate, what POs (purchase orders) on which they’ll be fined, FAQs, and routing guides. When coming into an agreement with a retailer that has fining and deductions, it’s beneficial to discover where they can access this information to find the complete details. It could also help to ask the retailer to give a walkthrough of where to find such things to ensure they know where to grab them, or ensure employees know where to find them.

 

  1. Check your scorecard monthly that’s measuring your OTIF performance. It’s printed two weeks after the month ends. This gives time for the data to catch up because sometimes you will see a bad score before the data has been inputted as freight is still being received. Retailers such as Target, however, will fine by the week rather than by the month. Understanding the differences of each retailer’s OTIF fine schedule is crucial for mitigating fines across the board. It’s also important to check in often to make sure that your scorecard is updated and reach out after one week if it’s not. If there is a mistake, sometimes the retailer will correct itself, but not always. Looking at the fine schedule weekly — and most importantly sharing it with your transportation provider so they can provide insight — is a good way to be in front of what to expect from a fine or deduction standpoint.
Walmart OTIF Guide

 The above graphic, taken directly from the Walmart 2020 Supplier Academy guide, shows the essential steps for maintaining a good scorecard.

 

How a 3PL can help

Knowing the ins and outs of these routing guides takes time and experience. It’s even helpful to count on people who have honed their craft on them rather than tackling them by yourself. In most cases, 3PLs will have a compliance manager who is primarily focused on anything compliance related including OTIF metrics, labeling, and systematic updates such as ASN (Actual Shipping Notification) to make sure everything is compliant.

The GEODIS team is constantly looking for changes and skimming portals to find any new documentation. Once we locate the most updated version, we save, store, and share internally, and then share with clients. Spending time proactively searching for these changes is essential to staying current. With some retailers, it’s harder to know when a change is coming, whereas others will make the information very public.

A good 3PL will also have technologies in place that make the process both error- and human-proof. We utilize G-Audit to ensure an efficient paper trail to make any disputes and analyze performance. It’s also important to make sure the technology is up to date as the market is constantly changing.

It’s key to have an OTIF checklist and action plan. GEODIS fully understands every step from warehouse and transportation because we have multiple clients shipping with different methods, giving us expertise with the ins and outs.

GEODIS provides experience and support when reviewing OTIF. Utilizing our Tier 1 technology and expertise, we tell you what you’re being fined for, provide ways to correct it, or provide a full paper trail to dispute it if it’s a mistake. Learn more about our RCS program here and how it can eliminate your stress of staying on top of OTIF compliance.

 

37 views

You may also like...

The Online Marketplace: Staying Ahead of the Game

The Online Marketplace: Staying Ahead of the Game [Infographics]

Explore todays’ challenges and develop solutions for your online marketplace
For Online Marketplaces, Late Daily Order Cut-off Time is King!

From a start-up to a major Online Marketplace! [Case Study]

GEODIS’ expertise in local logistics markets and multiple logistics processes proved to be instrumental to ensure the marketplace commitment to its customers.
GEODIS offers a great RCS program on the West Coast!

West Coast RCS. . . a GEODIS Perspective

We found that current shipping methods to the West Coast had too many touches and chances of orders being short. Standard LTL was also unreliable

You may also like...

The Online Marketplace: Staying Ahead of the Game

The Online Marketplace: Staying Ahead of the Game [Infographics]

Explore todays’ challenges and develop solutions for your online marketplace
For Online Marketplaces, Late Daily Order Cut-off Time is King!

From a start-up to a major Online Marketplace! [Case Study]

GEODIS’ expertise in local logistics markets and multiple logistics processes proved to be instrumental to ensure the marketplace commitment to its customers.
GEODIS offers a great RCS program on the West Coast!

West Coast RCS. . . a GEODIS Perspective

We found that current shipping methods to the West Coast had too many touches and chances of orders being short. Standard LTL was also unreliable