Undamaged Supplier Shipment Rate

Undamaged Supplier Shipment Rate

KPI Details

Undamaged Supplier Shipment Rate measures the consistency with which suppliers deliver undamaged shipments to the company. A low value for this KPI may suggest that the company has not created standard requirements for supplier shipments or that the company has poor communication with its suppliers in general. A high rate of damaged shipments will increase the cycle time for the company's deliveries to their customers (costing time and money) and will require employees to spend time resolving the issue of the damaged shipment, when their efforts should be focused on core operations. Undamaged Supplier Shipment Rate can be increased by providing incentives to suppliers for damage-free shipments or by setting standards for how to package certain shipments in the supplier contract.

KPI Definition

The total number of orders received from suppliers without any damage divided by the total number of supplier orders received over the same period of time, as a percentage.

KPI Best Practices

• Periodically audit suppliers to identify high and low performers in terms of order accuracy and condition
• Where possible, use regional suppliers to decrease transit time, costs and damages
• Provide suppliers with incentives to improve order handling and quality assurance standards

KPI Calculation Instructions Undamaged Supplier Shipment Rate?

Two values are used to calculate this KPI: (1) the number of orders received from suppliers without any damage, and (2) the total number of supplier orders received during the same measurement period. Damaged shipments should be defined as any shipments that cannot be resold or used as a component due to defects in the good/material. Do not include shipments with damaged packaging that did not impact the goods/materials in the numerator of this calculation.

KPI Formula :

(Total Number of Undamaged Orders Received / Total Number of Orders Received) * 100