C-OTIF is one of our most important KPIs used in our Supply Chain. However, we significantly struggle with defining and measuring the Requested Delivery Dates. Since we rely heavily on EDI, most of our customers do not submit specific requested delivery dates, so SAP (R/3) defaults to a date that is typically two days in the future. We may have "unwritten agreements" with specific customer groups, such as pharmacies accepting RDDs of +4 days, wholesalers up to a week, or even specific agreements with individual customers. However, as long as there is no specific RDD mentioned in the PO, SAP defaults to a standard RDD. We are wondering how other companies manage this without manual intervention. Are there any best practices?
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Senior Director of Supply Chain8 months ago
Hi.. This is a classic problem when you begin to establish a new KPI in the organization. In my opinion COTIF is not a SCM KPI but a business KPI and if business wants to commit to customers on a reliability index, the expectations from customers need to be clear upfront. RDD should be made mandatory during order intake and if not given those orders should be excluded from the measure. Other tactical way could be to change default in SAP from 2 days to 7 days.
no title8 months ago
Dear Ankit, thanks so much for your valuable and great insights, which mirror our thinking as well. Good to see that other global players think along similar lines.
In such cases you could use CDD in SAP - confirmed delivery date. This can be applied as the handshake between supplier & customer, which then begins the messing OTIF.
Measurement should be agreed internally and with customer (if any contractual obligations).