Boosting your OTIF score: How the right partner and TMS platform improves compliance for food shippers

On-time In-full shipping, or OTIF, is a crucial metric directly impacting the success and efficiency of food supply chains. The abbreviation refers to shippers delivering products within a certain drop-off window (on-time) and in the correct quantities (in-full).

 

OTIF Compliance

Meeting OTIF requirements is essential for keeping:

• Customer satisfaction
• Shelves stocked with in-demand products
• Perishable items from spoiling

The compliance standards are meant to also keep food shippers competitive and on good terms with retailers. However, most shippers fail to meet the OTIF requirements with late deliveries or short orders that incur fines and affect profit margins. According to a report from McKinsey & Company, the U.S. food retail industry loses an estimated $15–20 billion in sales every year because items are out of stock or otherwise unsaleable.

The OTIF noncompliance bill can devastate small-to-midsize businesses trying to:

• Expand their market reach
• Build a positive reputation among retailers
• Improve their OTIF score

So, how do shippers improve operational visibility and optimize transportation to avoid these consequences? 

 

Implement TMS Technology 

Updating your shipping process with advanced technology helps with:

• Reducing manual errors or delays impacting your OTIF score
• Automating order processing
• Real-time tracking of your shipment
• Enhance operations by replacing outdated methods like spreadsheets and emails

In return, the staff is less involved in the day-to-day, shipment-by-shipment operations and has more time to focus on strategic actions, such as monitoring supply chain performance and addressing potential issues to avoid OTIF fees.  

For food shippers, managing multiple orders within a single shipment is common practice and require employees to rework orders at the last-minute due to the nature of retailer shipping. This frequent scrambling often leads to accessorial fees, like a detention charge, reconsignment charge or a truck order not used (TONU).

Leveraging load optimization and lane consolidation technology tools help:

• Manage last-minute order changes
• Optimize delivery routes
• Ensure effective shipping methods
• Minimize transportation costs

Additionally, TMS software that includes real-time GPS tracking enables shippers to anticipate and mitigate potential delivery delays, increasing proactive communication with retailers regarding OTIF shipment status to establish a relationship of transparency and trust. 

 

Cultivate a Carrier Network 

Establishing strong partnerships with reliable carriers is vital for achieving consistent OTIF performance. While core carriers offer stability, diversifying the carrier portfolio through partnerships with third-party logistics providers (3PLs) expands access to quality carriers and increases flexibility with more shipping options such as LTL shipping. 

In the food retail industry, timely deliveries and fulfilled orders are not just a matter of convenience but critical for meeting customer expectations and ensuring the usability or availability of a product.

By implementing technological innovations and optimizing shipping processes, food shippers can:

• Improve operational efficiency
• Minimize costs
• Ensure timely and complete deliveries
• Strengthening customer relationships
• Drive business success

 

How DLX Became the Food & Meat Shipping Experts

Food shipping insights don’t have to stop here! If you’ve enjoyed this article, head over to our Meat Shipping Experts page to learn more about how we’ve helped some of the nation’s leading food companies streamline their operations and save on shipping.  

 

TMS with an X-Factor 

Dynamic Logistix is a third-party provider of shipping and freight solutions that combines a world-class XTMS platform with stellar personal service. Our technology, our culture and our connections with shippers allow us to provide premium shipments to our carrier network. Book a demo to learn more about our full-service transportation management system.