How to Calculate OTIF Delivery Rate
On-time in-full (OTIF) delivery rate is a core service-level metric in retail, manufacturing, and logistics. It captures how often customer orders arrive within the promised window and with the full requested quantity. Because penalties, chargebacks, and contract renewals often hinge on OTIF, you need a transparent and repeatable calculation method.
This guide clarifies OTIF definitions, documents each variable, and walks through a calculation workflow that reconciles to shipping system data. The steps complement throughput tools such as the warehouse order picking productivity walkthrough and financial recovery models like the supply chain chargeback recovery calculator.
Definition and reporting boundary
OTIF measures the percentage of orders that are delivered both on time and in full. The on-time window is typically defined by a delivery appointment or service-level agreement, while in-full requires that the delivered quantity meets the customer’s tolerance for short shipments.
Define your unit of measure before calculating. Some organizations track OTIF at the order level, while others calculate at the order-line level to account for partial shipments. Use one definition consistently and document it for auditing.
Clarify whether substitutions, backorders, or split shipments are allowed. If the customer accepts partial deliveries but requires the remainder within a secondary window, document the secondary rule so the OTIF classification reflects the contract.
Variables and units
OTIF inputs are counts of shipped orders or lines during the reporting window. These should be reconciled to your shipment confirmation system.
- Ototal – Total orders shipped in the window, unit: orders.
- Ootif – Orders delivered on time and in full, unit: orders.
- OTIF – Delivery rate, unit: percentage.
OTIF formula
The delivery rate is the share of total shipped orders that satisfied both service criteria.
OTIF = (Ootif ÷ Ototal) × 100
If your customer contract allows partial credit for near-full shipments, capture that tolerance in your data before computing the ratio. Avoid retroactive adjustments after the ratio is published.
Step-by-step calculation workflow
Step 1: Lock the service-level definition
Confirm the promised delivery window and the in-full tolerance, such as 98% of ordered units. Ensure the same rules apply across the reporting window to avoid inconsistency.
Step 2: Extract shipment records
Pull shipment confirmations or proof-of-delivery records for the period. Tag each order as on-time, in-full, and OTIF-compliant according to the definition. If you use order lines, aggregate each order’s line-level results.
Step 3: Count total and OTIF-compliant orders
Sum all shipped orders for Ototal and all OTIF-compliant orders for Ootif. Reconcile the totals with your warehouse management system and inventory records.
Step 4: Calculate and document the OTIF rate
Apply the formula, round to two decimals, and report both the percentage and the numerator/denominator counts. This detail is critical when cross-referencing inventory settings like the safety stock and reorder point planner.
Validation and troubleshooting
Validate that the total shipped orders match billing records for the same period. If the OTIF count exceeds the total, verify that duplicate records or split shipments were not double-counted. Compare monthly OTIF trends against labor productivity metrics and transportation disruptions to explain spikes or drops.
When discrepancies persist, sample shipments and confirm whether the on-time window or in-full tolerance was misapplied. Keep raw flags so future audits can trace how each order was classified.
Reconcile OTIF classifications with customer portals and EDI acknowledgements to ensure that your internal delivery timestamps match customer-recognized receipt times. Differences between carrier scan times and customer dock confirmations often explain large mismatches in reported OTIF.
Limits and interpretation
OTIF measures service reliability but does not capture cost-to-serve, margin impact, or demand variability. A high OTIF rate can still coincide with high expediting costs, so pair it with transportation spend and fill-rate analyses.
For seasonal businesses, compare OTIF across similar periods rather than across peak and off-peak months. This approach avoids misreading natural load spikes as structural failures.
Operational levers and root-cause analysis
Once the OTIF rate is calculated, segment the misses by cause codes such as late carrier pickup, inventory shortage, warehouse picking error, or customer appointment change. This breakdown turns the percentage into an actionable backlog for operations teams.
Track OTIF by facility, customer tier, and product family to surface structural constraints. If misses cluster around a few SKUs, tighten replenishment policies. If misses are transportation-driven, renegotiate carrier lead times or add buffer capacity during peak weeks.
Worked example: retail replenishment program
A retailer records 1,200 shipped orders in a month. Of those, 1,080 arrive within the delivery window and meet in-full requirements. OTIF is (1,080 ÷ 1,200) × 100 = 90.00%. If the customer target is 95%, the program is 5.00 points below the benchmark and may trigger a performance action plan.
Embed: OTIF delivery rate calculator
Use the embedded calculator to confirm the OTIF percentage, record your numerator and denominator, and benchmark against your target service level.