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Like every quality hardware supplier, Mila’s target OTIF is 100% – every single item in stock and available for immediate delivery.
Mila measures and reports our OTIF every day and, at the time of writing, our scores are 95% on order OTIF and 99% on line OTIF.
Because we know how important reliability and in stock availability is to our customers, we have always tried to set the agenda in this area and we impose our own very strict OTIF measure. Quite simply, if one single item on an order or one individual line is not available, then that order fails the test. I’m aware that’s not the measure used by some of our competitors, but it is the one which I believe gives the most honest and accurate picture of our performance.
Of course, whilst 95% OTIF might seem impressive in the context of the 10,000 items we hold in our warehouse, we are always pursuing ways to achieve that magic 100% reliability without sacrificing either cash flow or efficiency. We believe in continual improvement and the whole of the supply chain team at Mila is focused on delivering the incremental improvements in service and delivery which will help us edge closer to our ultimate target.
This is why we have just developed a brand new metric of supply chain performance which we are calling COTIF (Complete On Time In Full). For the first time, this moves beyond just measuring the amount of stock in our warehouse available for immediate delivery and instead measures every single issue associated with that order at every stage in the supply chain – from the freight load when it leaves the factory to the despatch vehicle when it reaches the customer.
It measures every OTIF failure, every failed delivery and every complaint on our system so it really is a ‘Complete’ measure. Essentially, it gives us a much broader picture of our whole supply chain and means we can identify and address much more quickly and effectively every single area which could potentially create disruption for a customer.
To coincide with the introduction of COTIF, we invested in a complete IT upgrade, which has obviously reduced mistakes arising simply from date entry, but which, more importantly, has given us the capacity to crunch the much bigger numbers we are now working with in terms of data. We have a vast amount of information now available to manage improvements against and we are already seeing the first positive results from our analysis of that.
In the first year of COTIF, our score is currently running at 88% – significantly less than our 95% OTIF of course – but contained within that 88% is all of the information we need to put in place a strategic improvement plan which is focused, detailed and accountable enough to address all of the specific elements of error.
For example, our COTIF analysis showed that product non-compliance was higher than expected so a new targeted Quality Improvement Task Force has been created working between the UK and China specifically focused on reducing this. This group is sharing knowledge much more widely about how all of our various suppliers operate and helping them to improve. Product rejections are now running at 0.05% so it’s clearly doing its job.
A new AGR inventory control solution has also been put in place to help us improve service whilst maintaining an optimum inventory value, and an upgrade to our Warehouse Management Software is already reducing errors and improving warehouse productivity.
Following the order right through the point when it is delivered to the customers, Mila has also now negotiated a new contract with our third party delivery company largely on the basis of the fact that they have recently invested £600K in the latest delivery technology.
It’s important to stress that the introduction of COTIF is not our response to supply chain failure – it is our response to success. We know that we are the market leaders in terms of supply chain but we will never be satisfied with 95% OTIF. We know that we have the capacity and the expertise to reach 100% and I believe we have taken a very significant step towards getting there.
