Author: Evelyn McCarter
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.
And while DC staffs are struggling hard, incentivizing dropping trailers and disincentivizing live unloading, this 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:
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.