Delivery in full, on time (DIFOT) is a fundamental measure when analyzing the performance of your supply chain. The main goal is to get your customers the products they need, when they need them, in the quantity they ordered. DIFOT measures how successful your business is at achieving this objective and identifies fulfilment problems and supplier reliability.
It would be unthinkable for a business not to measure sales figures and cash flow and it should be equally unthinkable for manufacturing or distribution businesses not to manage DIFOT.
DIFOT is simply the number of orders that were delivered on time, with the right quantity of the correct products, on the day that the customer required them.
If you delivered 50 orders on a particular day and 42 were delivered in full, on time; the DIFOT KPI is 84% (hint, not very good).
How can DIFOT be used?
You can use this to measure your performance or the performance of your suppliers. If you are measuring your suppliers, you might be interested in understanding the suppliers that are always late with the supply of stock. Or finding which suppliers are getting your order to you on time but not the quantity you ordered.
Using DIFOT to check those lead times ensures that when contract renewal time comes around — you are well informed — about supplier performance across all of your products. If you’re a distributor, you could measure your DIFOT and use it to promote your company’s excellent service.
What impacts DIFOT?
Appropriate stock levels underpin customers getting their products delivered in full on time. The ability to meet purchase requirements is important for customer retention.
Understock – carrying too little stock can put a real dent in your DIFOT. Forecasting when you might have too little stock can be tricky. Factors including seasonal trends, industry trends, customer buying habits and supply lead times can all impact stock levels.
Human error – everyone makes mistakes, but they can be costly. Human error can include miscounting, misreading or misplacing part of an order. Once this occurs, your DIFOT will take a hit.
Disorganized warehouse – running an inefficient warehouse can be costly. Constantly fixing mistakes or losing orders can mean you are forever playing catch-up. If your company is receiving endless phone calls regarding shipment mistakes, it’s time to consider how your warehouse is being run.
Manufacturing fault – if a product is broken, tampered with or simply not up to satisfactory levels, it can’t be sent out. If you don’t have enough of that type of product in storage it will impact DIFOT.
Whatever it might be that is impacting your ability to DIFOT, effectively tracking supply chain and monitoring what might causing leakage can help get things back on track.
Getting DIFOT right
Using complex spreadsheets to keep track of supply chain can be time consuming and error prone. Instead, smart companies are investing in business intelligence solutions to better manage inventory levels and order fulfilment rates.
Supply chains are complex so distributors and manufacturers need tools to help them understand inventory in real-time so you can quickly adjust demand-forecasting and improve planning accuracy.
Most organizations already know what their DIFOT percentage is, but the key is being able to easily pinpoint what the issues are when they occur, and why.
Business intelligence (BI) lets you ask questions of your data to find out when DIFOT occurs and when it doesn’t. You can drill down and discover the products that have been causing you to not DIFOT, for example, and then take appropriate measure to fix the problem.
How a BI solution can improve DIFOT performance ?
A BI solution such as Phocas helps you measure DIFOT and pinpoint areas that need improving. Once you know the issues holding up your ability to DIFOT, you can address them.
- Issues with the product? It’s time to talk to the supplier
- Recurring human error? Now you know you need to improve processes
- Stock being mixed and/or lost? Perhaps it’s time to increase warehouse efficiencies
You don’t have to be a spreadsheet expert to use Phocas. Anyone can analyze and make sense of the available data.You need a whole-of-business-solution that helps you get answers to your pressing questions in seconds, bringing together data from across the business into one source of truth.
For more information about DIFOT and business intelligence, watch this webinar on Inventory and stock insights.