On-time Shipment Readiness

On-time Shipment Readiness

KPI Details

On-Time Shipment Readiness measures the company's reliability in getting orders prepared for shipment. A low value for this KPI may be an indication of inefficient order entry operations, understaffed loading docks, poor inventory management, inaccurate demand forecasting or a lack of controls in place for order picking. Low values for this KPI are also likely to lead to high rates of late deliveries to customers, which are going to have a negative effect on customer relationships and can lead to attrition. Low performers should track On-Time Shipment Readiness over time to monitor progress and identify root causes of late shipments to improve customer satisfaction.

KPI Definition

The total number of orders picked, packed and ready for shipment by the designated shipping time divided by the total number of orders shipped over the same period of time, as a percentage.

KPI Best Practices

• Staff warehouse appropriately to correspond with increases in order demand
• Perform routine preventative maintenance on order picking equipment to reduce downtime
• Regularly audit order processing and entry methods to assess areas of improvement

KPI Calculation Instructions On-time Shipment Readiness?

Two values are used to calculate this KPI: (1) the number of customer orders that are shipped by the designated shipping time, and (2) the total number of customer orders shipped during the same measurement period. The designated shipping time may be a time that is set by the company to ensure timely delivery to the customer, or it may be a time that is defined by the customer. "Shipped orders" are orders that have left the loading dock and are in transit to their final destination. All necessary documents for the order (packing slips, etc.) must also be completed to be considered "on-time."

KPI Formula :

(Total Number of Orders Shipped by the Designated Time / Total Number of Orders Shipped) * 100