Cleo, a global leader in AI-native supply chain orchestration solutions through its Cleo Integration Cloud (CIC) platform, today released new research revealing that On‑Time, In‑Full (OTIF) performance failures impose approximately $100 billion in annual economic impact on North American consumer packaged goods (CPG) and food & beverage manufacturers. Roughly 90% of that impact comes from indirect costs, including lost sales, reduced shelf presence, excess inventory, and manufacturing inefficiencies.

The report, The $100 Billion Supply Chain Penalty: OTIF’s Total Economic Impact, examines how delivery performance affects an organization’s financial results and competitive standing. It identifies a significant management blind spot: while companies track retailer deductions and delivery metrics, the broader consequences of OTIF failures often remain disconnected from executive decision-making.

“A missed delivery can cost a manufacturer its next order, its shelf space, and ultimately its standing with a retailer. The chargeback captures only a fraction of that damage,” said Mahesh Rajasekharan, President and CEO of Cleo. “The deeper problem is fragmented accountability: logistics tracks delivery performance, finance tracks deductions, and sales tracks lost business, while the connections between them go unaddressed. CEOs need to make OTIF a shared business priority, with clear ownership of its full financial impact. Supply chain orchestration connects decisions and actions across manufacturers, carriers, and retailers so they can address problems before a delivery failure becomes a commercial loss.”

The Financial Impact Extends Beyond the Shipment

Drawing on industry benchmarks, publicly documented retailer programs, and scenario-based economic modeling, the research report identifies several findings with implications for manufacturing leaders:

Indirect costs dominate the economic impact.

  • Cleo estimates annual direct costs of $10–11 billion and indirect costs of $85–90 billion across U.S. and Canadian CPG and food & beverage manufacturers. Reduced shelf presence and order allocation can extend the consequences of a delivery failure well beyond the original shipment.

Root causes often emerge before transportation begins.

  • Inaccurate demand forecasts, late purchase order transmission, and promotional spikes can strain production and logistics capacity. Addressing these failures requires coordination across planning, order management, manufacturing, and transportation.

Chargeback recovery leaves the underlying exposure unresolved.

  • Dispute management consumes resources and can recover some deductions, but does little to improve the delivery performance that determines future penalties and commercial outcomes.

Better OTIF performance represents a substantial economic opportunity.

  • The report estimates that a 5–10 percentage-point improvement could unlock $11–23 billion in recoverable value across the market.

Delivery Reliability Shapes Future Business

Retailers use supplier performance to inform decisions about shelf placement, promotional opportunities, and order allocation. Repeated OTIF failures can create a compounding cycle: weaker scorecards lead to reduced commercial opportunities, while lower revenue and tighter margins constrain the investments needed to grow the business or improve execution.

The report recommends that manufacturers establish a unified view of OTIF’s financial impact, supported by an executive sponsor with P&L accountability. This connects delivery performance, deductions, inventory costs, and commercial outcomes within a shared management framework.

A Practical Path from Measurement to Prevention

The report outlines a phased approach: measure total OTIF exposure, address the planning and execution failures driving that exposure, and use sustained delivery reliability to strengthen retailer relationships and competitive positioning.

The report evaluates several approaches, including tactical compliance management, logistics technology, supply chain intelligence, retailer collaboration, and supply chain orchestration. It describes orchestration’s role in connecting planning, execution, and collaboration across the supply chain, enabling organizations to identify risks and coordinate action earlier.

The full report provides a detailed methodology and modeling framework, enabling manufacturers to better understand their own OTIF exposure and the economic tradeoffs involved in improving service performance.

About the Research

The $100 Billion Supply Chain Penalty: OTIF’s Total Economic Impact analyzes the financial effects of OTIF non‑compliance for North American CPG and food & beverage manufacturers across multiple revenue segments. The study incorporates industry benchmarks, publicly documented retailer programs, labor and logistics cost data, and scenario‑based modeling to estimate both direct and indirect economic impact.

About Cleo

Cleo is a leading supply chain orchestration software and solutions company that modernizes the movement and integration of B2B data to help businesses bridge the gap between supply chain planning and real-time execution.

About Cleo Integration Cloud

Cleo Integration Cloud (CIC) is an AI-powered platform, purpose-built to design, build, operate, and optimize supply chain processes by bringing together API, MFT, EDI, non-EDI integrations, and managed services through modern supply chain solutions. Cleo’s solutions provide its customers strategic end-to-end visibility into and control over revenue-critical business flows occurring across their ecosystems of partners and customers, marketplaces, and internal cloud and on-premise applications. More than 4,000 middle-market and enterprise customers across transportation & logistics, wholesaling & distribution, and manufacturing industries rely on Cleo to rapidly onboard trading partners, enable integrations between applications, and streamline supply chain workflow through proactive insights.

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