Supply Chain Finance in the Gulf — When Your OTIF Performance Is a Revenue Problem

OTIF Is a Finance Problem, Not Just an Operations Problem

When OTIF (On-Time In-Full delivery performance) falls below 80%, operations managers talk about logistics, warehouse capacity, and carrier relationships. Finance teams typically aren't in the room. They should be.

OTIF below target has direct financial consequences: revenue is recognised later than planned, customer penalties eat margin on the affected orders, reorder confidence drops leading to smaller future orders, and working capital is locked in partially-complete orders that haven't shipped. For a chemical manufacturer we worked with, the OTIF was running at 68-74% for the first half of the year. The financial impact was not being tracked — orders were shipping late, revenue recognition was shifting between periods, and the P&L was showing volatile, lumpy revenue that management assumed was demand-driven.

The Daily Financial Refresh That Changed Operations

The intervention was not primarily operational. We built a daily financial refresh that connected order management data to the finance system — tracking, for every open order, the planned revenue recognition date, the current OTIF risk based on production schedule, and the financial impact of delay in terms of revenue shift and margin penalty.

This daily view — which the finance director reviewed each morning with the operations head — changed decision-making in the S&OP (Sales and Operations Planning) process. Previously, production scheduling prioritised by order date. With the financial view available, scheduling could prioritise by financial impact — shipping the orders with the highest penalty risk or the largest revenue at stake first when capacity was constrained.

The effect on OTIF was gradual but consistent. By July — four months after the daily refresh was implemented — OTIF crossed 80% for the first time in the year. By December, it was at 87%. The 15 percentage point improvement from the pre-intervention average came from better prioritisation, not additional capacity or headcount.

Working Capital Is Also in the Picture

Supply chain finance is about more than OTIF performance. The timing of when inventory is purchased, when it converts to finished goods, when it ships, when the invoice goes out, and when it's collected — the cash conversion cycle — is directly affected by OTIF performance. An OTIF improvement that gets orders out 8 days earlier on average compresses the cash conversion cycle by 8 days. For a business with $50M in annual revenue, that's approximately $1.1M in working capital released.

The Gulf manufacturing environment has specific supply chain finance dynamics — long lead times on imported raw materials, letters of credit requirements for international suppliers, and supplier payment terms that are often 30 days while customer collection terms stretch to 60-90 days. Mapping these dynamics explicitly in a working capital model, and tracking them daily with the same rigor as P&L, is how businesses in this environment optimise cash generation.