On-Time Delivery (OTD)
Definition
Measures the proportion of orders that are delivered to customers on or before the promised delivery date.
Importance
Why It Matters
OTD reflects the reliability and efficiency of the supply chain. High OTD rates indicate a company’s ability to meet customer expectations and maintain trust.
Formula
On-Time Delivery (OTD) = ( Total On-Time Deliveries / Total Deliveries )× 100
Use Cases
Example
If a company delivers 950 out of 1000 orders on time, the OTD rate is 95%.
Practical Application
Used by logistics and operations managers to evaluate and improve delivery performance. For example, a logistics company uses OTD to monitor and enhance the punctuality of its delivery fleet.
Best Practices
- Implement accurate delivery scheduling systems.
- Monitor and analyze delivery performance data to identify delays.
- Collaborate with reliable carriers and optimize route planning.
FAQs
What factors affect On-Time Delivery?
Factors include shipping delays, inventory issues, and logistical inefficiencies.
How can businesses improve On-Time Delivery?
Use real-time tracking, enhance communication with carriers, and optimize inventory management.
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