Transform DTC Supplier Performance With These Four Metrics

For direct-to-consumer brands, supplier reliability isn't just a procurement concern—it's a customer experience issue. When suppliers fail to deliver on time or in full, DTC brands face stockouts, delayed customer shipments, and erosion of the brand promise that drives customer loyalty. Yet many growing brands still rely on gut feeling or reactive firefighting rather than systematic supplier performance measurement.

What is OTIF (On-Time In-Full)?

The most critical metric for supplier performance is On-Time In-Full (OTIF). This measures what percentage of orders arrive both when promised and with the complete quantity ordered. While simple in concept, OTIF captures the two dimensions that matter most: timing accuracy and quantity completeness.

OTIF originated in 2017 when Walmart began evaluating suppliers against delivery promises, eventually setting a 98% requirement by 2020. For DTC brands with direct customer relationships and tight inventory models, even small OTIF drops can create significant problems.

Why OTIF Matters for DTC Operations

DTC brands operate with fundamentally different constraints than traditional retail. Without the buffer of store inventory or regional distribution centers, many rely on streamlined fulfillment models where incoming supplier shipments flow almost directly to customer orders. A supplier delay of just a few days can cascade into customer order delays, support tickets, and damaged brand reputation.

Moreover, DTC brands typically run leaner inventory positions to preserve cash flow and minimize obsolescence risk. This makes demand forecasting more critical—and supplier reliability essential. When a supplier ships 80% of an expected order, the brand doesn't just face a temporary shortage; it faces immediate customer impact and potential revenue loss during high-demand periods.

See related: How Made by Mary Reduced Inventory on Hand by 50%

When Supplier Performance Matters Less (And When It Doesn't)

Here's an important nuance that's often overlooked: rigorous supplier performance tracking isn't equally critical for all DTC business models.

If your brand operates with high inventory levels—maintaining 90, 120, or 180+ days of stock in the warehouse—supplier timing precision matters far less. The inventory buffer absorbs supplier variability. A shipment arriving a week late doesn't impact customer orders when you have months of safety stock sitting in the warehouse. Similarly, brands that sell primarily on pre-order models or have highly predictable, slow-moving inventory can tolerate supplier inconsistency without customer impact.

Our strongly held view: If your product has low carrying costs, you're almost always better off maintaining higher inventory levels rather than optimizing for supplier agility.

The economics are straightforward. Just-in-time (JIT) inventory models and tight supplier performance management create operational complexity that has real costs: dedicated procurement resources, constant monitoring, supplier relationship management overhead, forecasting sophistication, and the organizational discipline to act on performance data. This complexity makes sense when carrying costs are high—think perishable goods, fashion with seasonal obsolescence risk, or high-value electronics with rapid depreciation.

But for products with low carrying costs—stable catalog items, non-seasonal basics, products with long shelf lives—the math often favors simplicity. Carrying an extra 60 days of inventory might cost 2-3% of product value annually in warehouse space and working capital. Compare that to the hidden costs of JIT operations: the procurement analyst time, the expediting fees when suppliers miss dates, the lost sales from stockouts, the operational stress of managing tight inventory windows, and the opportunity cost of executive attention spent firefighting supply issues rather than growing the business.

A brand selling durable goods with a one-year catalog life cycle should probably carry 120 days of inventory and dramatically simplify their operations rather than hire a procurement team to squeeze suppliers down to 30-day lead times. The carrying cost is trivial compared to the operational complexity avoided.

The strategic question isn't "How do we get better at JIT?" but rather "Do our product economics justify the operational complexity of JIT?" For many DTC brands, the honest answer is no—and they should optimize for operational simplicity instead.

See related: Preparing Your Operations for Peak

When Supplier Performance Becomes Critical for DTC Brands

Supplier performance becomes critical at a specific inflection point: when the cost of inventory errors exceeds the cost of prevention. This typically happens when:

• Your carrying costs exceed operational complexity costs for products with high product value or rapid obsolescence (e.g. fashion, electronics, perishables)
• Inventory represents your largest cash outlay during rapid scaling
• Physical constraints with limited warehouse capacity make storing buffer inventory impossible
• Your business model eliminates inventory buffers by design (made-to-order)

For these businesses, supplier reliability directly determines customer experience and unit economics. Measuring and managing supplier performance isn't optional—it's a core operational capability.

See related: Inbound Supply Chain: Where Most Ops Problems Start

Breaking Down Supplier Performance Metrics for DTC Brands

When supplier performance truly matters for your model, understanding it requires decomposing OTIF into component metrics:

On-Time Delivery Rate measures whether shipments arrive within the agreed delivery window, regardless of quantity. This isolates timing reliability from quantity accuracy and helps identify whether suppliers struggle with logistics, production planning, or internal coordination.

In-Full Delivery Rate tracks quantity completeness independent of timing. Chronic in-full failures often signal production capacity constraints, quality issues, or inventory management problems at the supplier level.

Early Delivery Rate might seem positive but can create warehouse capacity constraints and cash flow impacts, especially for brands with JIT fulfillment models or limited receiving capacity.

Late Delivery Rate directly impacts customer experience and should be analyzed by severity—a shipment one day late has different implications than one two weeks late.

See related: Elevate your customer experience with these 5 strategies

Operationalizing Supplier Measurement for DTC Brands

Effective supplier performance tracking requires comparing expected delivery dates (as set when purchase orders are created) against actual receipt dates in the warehouse. This data should flow automatically from your purchase orders through receiving processes, eliminating manual tracking and potential data gaps.

Leading DTC brands review supplier performance monthly or quarterly, using data to drive supplier relationship conversations. High performers earn priority status and larger order volumes, while underperformers trigger improvement plans or alternative sourcing initiatives.

Automate Supplier Performance Tracking in Fulfil ERP

Fulfil's Shopify-centric eCommerce ERP automates supplier performance tracking through its Supplier Performance Report. The system automatically calculates OTIF and related metrics by comparing the original planned date on supplier shipments against actual receipt dates.

The report displays each supplier's order lines, early deliveries, delayed shipments, on-time performance, and overall OTIF rate as a percentage. By drilling into individual suppliers, brands can see line-item details, including which specific products were delayed, actual versus requested delivery dates, and the number of days each shipment was early or late.

This visibility transforms supplier management from reactive firefighting into proactive relationship management—but only for brands whose business model genuinely requires that level of precision. For brands that can afford to carry more inventory, the smarter operational decision might be skipping the complexity entirely and stocking deeper.

Frequently Asked Questions

Can I use Fulfil's supplier performance data for vendor negotiations?

Yes. Fulfil's Supplier Performance Report provides line-item details, including specific delayed products, actual versus requested dates, and days early/late for each shipment. Export this data quarterly to build vendor scorecards for contract negotiations. High-performing suppliers can earn preferential terms or larger order volumes, while chronic underperformers may face penalties or reduced business based on objective performance data.

How do I automate supplier performance tracking and follow-ups?

Modern DTC brands automate supplier scorecarding by connecting their ERP data to workflow automation tools. For example, you can build a Parabola workflow using their Fulfil integration to trigger follow-up emails to underperforming suppliers when scores drop below thresholds. This eliminates manual tracking and ensures consistent supplier communication without adding headcount.

See related: How Caraway automates and centralizes supply chain data with Parabola and Fulfil