What a delivery SLA should contain, and what OTIF actually measures
By Muhamed Selmani, Founder
OTIF is one score: a drop counts only if it arrived inside its window and complete. Scored separately, a provider can miss both tests and still report well. A delivery SLA should fix the window, what counts as a miss, who decides, what evidence is captured per drop, how a shortfall is remedied and how a dispute is settled. Anything looser is a description of good intentions.
OTIF is one score, and the word doing the work is and
OTIF is on-time-in-full: the share of drops that arrived inside the agreed window and complete. Two conditions, one score. A drop that lands on time missing a case is not a partial success — the kitchen has the problem it would have had if nothing turned up.
That is obvious until you see how delivery performance is usually reported. On-time is one line, fill rate another, each respectable alone. Apart, neither describes what happened at the door: each hides the drops that failed the other test.
Worked example
Why two good scores make a worse one
Assumptions
- Illustrative arithmetic, not a measurement: a week of 100 contracted drops.
- 95 arrived inside their window, 95 arrived complete, and the two sets of failures do not overlap.
Working
- On-time alone: 95 of 100
- In-full alone: 95 of 100
- Drops failing at least one test: 5 late plus 5 short, so 10
- OTIF: 90 of the 100 drops
So: Two figures in the mid-nineties describe a week where one drop in ten went wrong. The shape is the point: the less the failures overlap, the further OTIF sits below either.
What counts as a miss, and who decides
Three definitions decide the number. Leave any open and you get a figure both sides can defend and neither can use.
The definitions to settle before the first report
- On time against what: arrival at the site, the goods-in door, or the last case off the vehicle. In a building with one lift, three different times.
- Whose clock: the driver's device, the site's log, or the record handed over. Name one, or 10 disputed minutes become a disputed month.
- In full against what: the order as placed, or as confirmed the evening before. A shortfall agreed at 18:00 is a supply problem scored as a delivery one.
- Whether a rejection counts. A load turned away at goods-in for condition did not arrive, whatever the timestamp says.
What a delivery SLA should contain
An SLA is not a statement of ambition. It is the document that decides, months later and under pressure, whether a bad month was a breach.
The terms worth fixing in writing
- The service: which drops, in what order, into which window, on which days. A percentage with no round attached has fixed nothing.
- The measure and its definitions, in the words both sides will read back later.
- The measurement period. A quarter smooths a bad week into invisibility; a week catches it.
- The evidence: what is captured at the door, when it reaches you, in what form.
- Cover: what happens when the person who runs your round is unavailable. Named in advance, or it is a hope.
- Exceptions — weather, road closure, a site that could not receive — and what proves one.
- Remedy: service credits, the threshold that triggers them, and what follows when it is crossed repeatedly.
- Escalation, reporting and exit: who is called and when, whether the failed drops are visible, and what both sides hand over.
Proof of delivery, and what makes it worth having
Proof of delivery is the record that a named person received a stated quantity, at a stated time, in a stated condition — plus the temperature record where the load needs one. It is the only part of the arrangement made while the facts are available.
A signature at the end of a round proves the round happened and nothing about the third drop.
What a proof of delivery record is worth checking for
- One record per drop, not one per round.
- A time recorded by the system rather than typed in later.
- The receiving person named, not a signature nobody can read.
- Quantity received, a different field from quantity despatched.
- Exceptions captured at the door — shortfall, damage, refusal — with the reason.
- Retention: how long records are kept, and how you get one.
What a short or wrong delivery costs a kitchen
The invoice value of a missing case is the smallest number in the room. A kitchen pays for a shortfall in what it does next.
Where the cost of a short drop actually lands
- The substitute, bought at retail at the last hour, by someone who should be doing something else.
- The manager's hour on the phone, then a second hour reconciling the credit note.
- Across a restaurant group, the same failure at several sites in one morning, because one round serves them all — which is why delivery accuracy is worth counting separately from lateness.
Service credits, penalties, and what makes a remedy real
Almost none of that reaches the carrier's ledger. Where carriage runs on the Road Haulage Association's Conditions of Carriage, liability for goods lost or damaged is capped by weight rather than value — a figure per tonne, set by the edition your contract names. Light, expensive chilled goods sit far above a cap set by the kilo.
Separate the covers, too. Public liability answers for third-party injury and damage to third-party property — a struck loading bay, an injury during unloading — never for the value of goods in a carrier's custody. Goods in transit is the cover that responds to your product.
Which is why service credits exist. The remedy for the goods is capped long before goodwill enters it, so the remedy for the service has to be built separately, by you. A credit is a rebate against the charge for the service that failed: compensation, priced. A penalty punishes instead, and how English law treats a clause drafted that way is a question for your legal advisers.
What separates a credit that works from one that decorates
- Applied automatically on the report from a measure both sides already produce, not claimed by a client who happened to notice.
- Large enough against the route's monthly charge to be felt on the provider's side.
- Stepped: 3 consecutive bad months cost more than one, and cross a threshold that gives you a right rather than a rebate.
- Not your only remedy unless you decided it should be. A credit written as the sole and exclusive remedy has bought out everything else.
Holding a partner accountable between reviews
The remedy that changes behaviour is rarely the credit. It is the right to move the route — a performance floor over a defined period, and the option to take it elsewhere when that is breached.
Delivery KPIs worth carrying for a restaurant group, per route and per site
- OTIF weekly, with the failed drops listed rather than summarised.
- A reason code on each miss, from a short agreed list, so patterns are countable.
- Time at the door per drop, which decides what a round costs and how late the last site is served.
- Temperature exceptions where the load needs the record, counted apart from lateness.
- Credit notes raised against delivery: accuracy measured by finance rather than ops.
- Monthly actions with owners and dates, and one person accountable on each side.
Reducing delivery failures
Most delivery failures in a food operation are not exotic, and several are fixable without changing provider.
Where delivery failures actually come from
- No cover. The commonest reason a round does not run is that the person who runs it was unavailable and nobody was named instead.
- A sequence built around the vehicle rather than the sites: convenient for the round, impossible for the kitchen.
- An unstaffed receiving end. A vehicle waiting for a door makes that drop late and pushes the rest of the round behind it.
- No exception route. When something goes wrong at 05:30 and the only option is a general number, the failure is already fixed in place.
When a drop is disputed
Disputes are decided by whose record is better, and both records were made on the day. Once the argument starts, neither side can add to the file.
Dispute resolution that does not lose you a fortnight
- Record the exception at the door, on their document as well as yours. A shortfall the driver signed for is a fact; tomorrow's email is a claim.
- Find out what your own carriage terms say about notice: what period they set for reporting loss or damage, who has to be told, and in what form. Three answers worth having before the morning you need them, and none of them is safe to assume.
- Reconcile against the same identifier, or the first hour goes on agreeing what is being argued about.
- Separate the three questions: did it arrive, was it complete, was it fit. A dispute that mixes them settles none.
- Keep the commercial remedy apart from the operational fix. Deciding who pays for Tuesday does not stop it happening on Thursday.
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FAQ
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