Of those companies, 92 percent agreed that an industry standard for OTIF would create value. To better understand industry perspectives on OTIF, the Trading Partner Alliance (TPA) and McKinsey surveyed 24 major retailers and manufacturers of consumer packaged goods operating in North America.
By contrast, only 4 percent of shipments to retailers arrive more than 12 hours late, a delay that would be likely to hit on-shelf availability. Unloading those deliveries early can disrupt distribution-center operations, while holding trucks until their scheduled slot leaves assets standing idle, consuming industry capacity while incurring demurrage costs. For example, about 25 percent of deliveries arrive more than two hours before their scheduled delivery appointment. There’s already some evidence that attempts to avoid late-delivery penalties may be driving inefficiencies in manufacturer and retailer supply-chain operations. Today’s diversity of approaches means partners waste time arguing over the figures, rather than addressing the root causes of delivery issues. Effective supply-chain collaboration depends upon a precise, common understanding of delivery-performance expectations. Does “on-time” mean on the date requested by the retailer, or the date promised by the manufacturer? Does it mean within the specific delivery slot allocated to the shipment, or any time inside a broader, agreed-upon time window? Should “in-full” be measured at the level of complete orders, line-items or individual cases?
In practice, however, there is no standard definition for OTIF, so different supply-chain participants may interpret the metric in significantly different ways. In theory, OTIF should be the ideal mechanism to align the objectives of retailers and manufacturers.
OTIF measures the extent to which shipments are delivered to their destination according to both the quantity and schedule specified on the order. In its effort to optimize its supply chains, the consumer industry has evolved in the way it measures delivery performance, moving away from the traditional “case-fill rate” and adopting the more rigorous “on-time in-full” (OTIF) delivery metric. With expectations of higher on-shelf availability and lower inventory costs, the pressure on delivery performance has intensified-as has the need for manufacturers, retailers, and carriers to work together to create efficient, reliable, and responsive supply chains. Supply-chain complexity is rising as customers demand a wider selection of products, a broader choice of channels, and more promotional offers. Please know, there are lots of shippers who prefer to get a live person than utilizing online technologies, which’s nice, however the Freight company has to have the ability to back up that with online technologies for fast reports and a much more efficient Distribution system.Those objectives are getting harder to achieve. We’re in Y2K!!! If a business is unable to offer you online capabilities and current information in your shipments then this could be an indication to find a different corporation. Nowadays larger businesses have started to exercise this choice too, since the demand for more warehouse area logistically situated close to their respective markets has made the leasing of third party warehouse area a far cheaper and expedient alternative. For smaller companies, the following has always been preferable, since it saves them the overhead costs of staffing and maintaining the warehouse. Warehouses may be proprietary, meaning possessed by a certain company to suit their particular needs, or commercial, meaning many distinct companies may use the identical warehouse centers to store and ship their goods. Read information below to find about Ontime Logistics, Logistics Tips and Transport News. 13 | 5201 Seekirchen am Wallersee About Ontime Logistics:.
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