On‑time, in‑full (OTIF) performance failures impose approximately $100 billion in annual economic impact on North American consumer packaged goods (CPG) and food and beverage manufacturers, according to a new report released by Cleo.
Roughly 90% of that impact comes from indirect costs, including lost sales, reduced shelf presence, excess inventory, and manufacturing inefficiencies.
“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,” says 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.”
Key takeaways:
· Cleo estimates annual direct costs of $10–11 billion and indirect costs of $85–90 billion across U.S. and Canadian CPG and food and beverage manufacturers.
· Inaccurate demand forecasts, late purchase order transmission, and promotional spikes can strain production and logistics capacity.
· Dispute management consumes resources and can recover some deductions but does little to improve the delivery performance that determines future penalties and commercial outcomes.
· A 5–10 percentage-point improvement could unlock $11–23 billion in recoverable value across the market.
