A high percentage of on-time delivery does not mean that your business is doing well in supply chain efficiency. It’s also important for a major role in customer retention.
On-time delivery (OTD) is a crucial performance metric used for measuring if an organisation is meeting their delivery goals. A consistently high performance in OTD is important for maintaining a positive brand reputation. This increases customer satisfaction.
However many companies struggle to maintain the high on-time delivery rate. This can become a bigger problem if there are high delivery volumes at an unprecedented rate. That is where this concept and planning of delivery on time comes in. Let’s see.
On-Time Delivery Formula
So, how do you calculate if the delivery is on time?
It’s quite easy. For measuring on-time shipping:
- Divide the total number of deliveries by the amount of late deliveries in a single period
- Late deliveries usually occur after the final deadline
Example: If the delivery date is 10th March at 4 PM and it arrives after that then it’s late. It’s late even if it arrives at 4:05 PM on 10th March. The formula for it looks like:
100-No. of Late deliveriesTotal No. of Deliveriesx 100= % of On-Time Deliveries
So, let’s say you have 1000 total deliveries and 25 late deliveries in a month, then your on-time delivery rate is 97.5%.
If you see that your rate is lower, then there are ways you can improve it. Let’s see how.
9 Ways to Improve Your On-Time Delivery
You must assess several parts of your business and order management to improve your delivery on time. Here are some key factors you need to work on:
- Efficient Management of Order and Inventory
Managing customer orders and inventory is crucial for keeping your delivery rate high, You must always carry the right products and keep them ready when needed. This means you need to do a predictive analysis of how much of each product is in demand and store them. You also need to know how much of each product you need to ship by a certain date.
- Optimise Your Warehouse
Your warehouse organization directly impacts your capacity to meet delivery deadlines. Here are essential steps to consider:
- Ensure products are stored for quick and easy retrieval.
- Package products securely to minimize damage and returns.
- Optimize loading procedures to streamline delivery routes, reducing driver time at each stop.
Let’s see the other ways you can improve the delivery rate.
- Rely on Delivery Planning & Route Optimisation Software
You can optimise your delivery scenario by figuring out which routes work the best. This means finding the most efficient routes to save on fuel and maintenance costs.
With the help of a route optimisation algorithm, you can also predict accurate ETAs, consider real-time traffic conditions like traffic, and road closures and even identify the priority of orders. This will help you always with on-time delivery.
- Live Tracking Tools Managing Customer Expectations
Once the delivery is out, you can provide the customers with an updated ETA with a live tracking link so customers can monitor their driver approaching in real time. Proper planning software offers the ability to send customer notifications.
- Optimise Last-Mile Visibility
Make use of the last-mile delivery software for viewing the real-time progress of each order from the moment it leaves the store or warehouse till it reaches the customer.
If there’s a delivery issue, you can identify where it went wrong. Identifying the problem from a single comprehensive dashboard is possible.
Last-mile visibility allows parties to collaborate and communicate. This ensures that everyone is on the same page when it comes to tracking packages and delivering updates.
Increased end-to-end visibility also doubles the likelihood of avoiding disruptions from the supply chains. With this software, you can also address supply chain efficiency measures like bottlenecks concerning personnel factors, namely, weather-proofing, routine maintenance work and route issues like construction and traffic; etc.
- Have Realistic Shipping Goals
Customers put pressure on matters of fast shipping and delivery. As a company it’s your job to ensure a fast and efficient fulfilment process and inventory management, or else, it can hamper your business.
When you have good supply chain and inventory management, you can ensure accurate forecast shipping dates and better on-time delivery benchmarks. This would allow your customers to know what they can expect from your delivery rate.
Customers appreciate transparency when they are making orders. Most customers want the estimated delivery date and they are likely to abandon their cart if they do not see a tentative delivery date.
- Enhance Post-Purchase Communication Proactively
66% of shoppers want status updates when it comes to updates and tracking of their deliveries. They are to receive these updates usually through email or text alerts keeping customers informed on how far their orders are.
Take InstaCart, a delivery solutions partner. It sends its clients messages and allows direct communication with the shoppers. You will always know exactly what is happening with your order until it is in your hands.
When the driver is at your location, an interactive will keep you alert about their real-time location. They can also take a photo of your delivery once they reach your location. Before they hand it over to you, it’s like a confirmation that you have received said order.
- Flexibility is Important
Consumers love the flexibility- especially when it comes to their order fulfilment. 52% of shoppers consider the multiple delivery options a significant factor in choosing where to shop.
As for the retailers, over the years customers have found other ways to make a purchase. Companies that offer fulfilment options increase operational efficiency, reducing costs, thus helping you manage inventory and improving on-time delivery. This also gives customers the flexibility to receive their purchase on a convenient date and time as per convenience.
Here’s the last way you can improve your organisation’s on-time delivery. It’s all about how you manage your inventory.
- Efficient Inventory Management
Delivery delays can lead to heavily outpacing supply. For such cases, retailers usually scramble for restocking, updating their website inventories and reordering from their suppliers.
Fifty-five per cent of shoppers prefer to browse online and check local in-store availability. However, 18% will take their business elsewhere if their in-store and online experiences don’t match. To avoid this, especially during peak seasons, ensure your inventory is synced in real-time between your website and warehouse or store.
Up-to-the-minute inventory monitory allows you the restock the right units of items at the appropriate time. This ensures top quality and enough items in stock.
All of these factors ensure a reliable delivery.
FAQs: Ways to Achieve On-Time Delivery and Enhanced Supply Efficiency
What is the difference between OTIF and OTD?
OTIF (On-Time, In-Full) measures both delivery punctuality and order completeness. OTD (On-Time Delivery) focuses solely on whether the delivery arrived on schedule.
What is a good OTD rate?
A good rate is 95% or higher. This indicates most deliveries are on time, meeting customer expectations and reducing delays.
What are some technological tools that can speed up delivery time?
Tools like route optimisation software, real-time tracking, automated dispatch systems and warehouse management systems (WMS) help accelerate delivery systems.
Conclusion
To maintain customer satisfaction and a strong brand reputation, you must have consistent on-time delivery By optimising inventory, leveraging technology, and refining processes, you can significantly improve your delivery efficiency. Struggling to meet your OTD goals?
Qodenext offers comprehensive supply chain management solutions to help streamline your operations and enhance performance. Ready to elevate your supply chain? Contact us today!
