Delivery in full, on time (DIFOT) rate

Delivery reliability matters to consumers and businesses alike. Customers expect the right order at the promised time; manufacturers using just-in-time supply and retailers protecting shelf availability can suffer immediate operational losses when either quantity or timing fails. DIFOT tests both conditions together.

When to use it

• Answer the key performance question: “To what extent are our customers getting what they want at the time they want it?”
• Assess this KPI within the Operational processes and supply chain perspective.
• Plan data collection, formula use, reporting frequency, and data-source requirements for this KPI.
• Compare results against the targets, benchmarks, examples, or trend guidance available for this KPI.

Origins

DIFOT developed through logistics and supply-chain service measurement rather than from one inventor. As distribution management matured in the late twentieth century, organisations combined two customer-critical conditions—complete quantity and promised timing—so that a partial or late shipment could not be reported as successful. OTIF and perfect-order measures are related variants. The promise date, unit of measurement and treatment of split or substituted orders must always be defined.

What it is

Perspective: Operational processes and supply chain perspective.

Key performance question: To what extent are our customers getting what they want at the time they want it?

DIFOT shows whether the organisation fulfils the complete order by the customer-agreed deadline. A weak rate can expose inventory shortages, production bottlenecks, inaccurate promises, picking errors or poor carrier performance.

Measure arrival at the customer, not merely dispatch from the warehouse. An order can leave the supplier on schedule and still fail in the last mile. From the customer’s perspective, only complete and timely receipt counts as success.

How to use it

Measurement

Classify each defined order, shipment or unit as successful only when it is both complete and on time. Divide successful deliveries by all eligible deliveries in the period.

Data collection method

An end-to-end order-tracking system should connect order capture, fulfilment, carrier events and proof of delivery. When a third party performs part of the journey, integrate its tracking information. If final delivery cannot be observed, use the dispatch point as an explicitly limited proxy or collect customer confirmation through a survey.

Formula

Frequency

Measure every delivery continuously when tracking is automated. Review exceptions quickly enough for operations teams to correct recurring causes.

Source of the data

Use order-management and tracking systems, supplemented by carrier data, proof of delivery and customer feedback where necessary.

Cost/effort in collecting the data

Existing accounting, ERP and quality systems often contain most required data, making extraction inexpensive. Building end-to-end tracking from scratch can carry substantial setup cost, and customer surveys add both cost and response uncertainty.

Target setting/benchmarks

A broad rule of thumb is to avoid falling below 95%, but critical industries may expect 98% or 99%. A useful target reflects customer promise, product criticality and the cost of failure, and should not excuse manipulation of delivery windows or substitutions.

Example

Consider an online grocer whose customers select a home-delivery window. A successful delivery must arrive inside that window and contain every accepted item. If an ordered product is unavailable, a substitute counts as complete only when the customer accepts it.

The ERP system records orders, while a device in each van captures arrival, customer signature and rejected substitutions so that refunds can be processed.

Suppose 1,000 orders are placed in one week. Of these, 980 arrive within the promised window and 20 are late. There are 550 orders containing substitutions, and customers reject a substitute in 50 of them. Three rejected-substitution orders are also late.

Count the late and incomplete orders, subtract the overlap to avoid double-counting, then compare the remaining complete, on-time orders with the total eligible orders.

Top practical tip

Record the customer-promised time and quantity at order confirmation, then retain every later change. That audit trail prevents revised internal dates from making performance appear better and lets teams attribute each failure to inventory, production, picking, transport or customer-requested change.

Top pitfall

Do not call dispatch-on-time a customer delivery measure. When final-mile data are unavailable, label the limitation and close it through carrier integration or proof of delivery. Otherwise a shipment delayed after leaving the warehouse will be reported as a success even though the customer experienced failure.

Further reading

www.leanmanufacture.net/kpi/ontimedelivery.aspx

Patrik Ertler, Supply Performance Measurement in der Praxis, VDM Verlag Dr. Müller, 2010