On-time Customer Order Delivery Rate

On-time Customer Order Delivery Rate

KPI Details

On-time Customer Order Delivery Rate measures the ability to adhere to target shipment dates when fulfilling customer orders. A relatively low rate of on-time customer deliveries may suggest bottlenecks in the packing or shipping phase of the order management process. Any manual tasks in the order management process (order processing, shipping address entry, delivery appointment scheduling, etc.) can also lead to a higher rate of late customer deliveries. Systematic issues with on-time delivery will lead to strained relationships with customers and will likely have a negative impact on the company?s bottom line. High performers for this metric tend to have superior demand forecasting, well-stocked inventory and well-maintained equipment.

KPI Definition

The total number of shipments received by customers on or before the committed ship or delivery date divided by the total number of shipments made over the same period of time, as a percentage.

KPI Best Practices

• Accurate demand forecasting and minimal backorder rates
• Well-maintained distribution and warehousing equipment to minimize delays
• Speedy order entry and order processing methods

KPI Calculation Instructions On-time Customer Order Delivery Rate?

Two values are used to calculate this KPI: (1) the total number of shipments received by customers on-time (i.e., on or before the committed ship or delivery date), and (2) the total number of shipments made during the same measurement period. An order is considered on-time if the customer receives the shipment by the time that is agreed upon by the customer and shipper based on an informal agreement or an agreement that is set forth in the purchase order (PO). Do not include on-time deliveries that are only partially filled in the numerator of this calculation.

KPI Formula :

Number of Shipments Received by Customers On Time / Total Number of Shipments Made) * 100