8 Strategies to Improve On Time Delivery

On Time Delivery is a very crucial Key Performance Indicator (KPI) used to evaluate the performance of a business and its ability to deliver products and services to customers in accordance with the agreed timeline. 

On Time Delivery KPI is significant for most industries such as retail, manufacturing, logistics and services as meeting deadlines is paramount for operational efficiency, customer satisfaction, customer retention and brand reputation.

This article will help you to understand the importance of On Time Delivery, the underlying reasons for delay in On Time Delivery and in exploring the strategies to improve On Time Delivery.

Why On Time Delivery Is Important

On Time Delivery is not only crucial for customers but also critical for various aspects of business. Some reasons which highlight On Time Delivery benefits are as follows;

• Customer Satisfaction is the numero uno reason why On Time Delivery is so important. Customers reinforce their trust in the business when they receive products or services on time. In highly competitive markets long-term loyalty from customers is a big deal and On Time delivery enables that relationship between customers and businesses.

• Customer Retention is a key factor that portrays how successful a business is. Businesses that are successful in retaining customers have to worry less about acquiring new customers. This is beneficial as acquiring new customers is more costly and time-consuming than retaining existing customers.

• Operational Efficiency of businesses improves due to On Time Delivery. A business that delivers On Time has control over its processes, manages its resources effectively and hence can meet the demands of its customers promptly. 

• Supply Chain Efficiency and better relationships with suppliers and partners are other major benefits of On Time Delivery. A business is able to deliver on time consistently due to support and reliability from its suppliers. It further leads to a more stable and efficient supply chain.

• Brand Reputation of businesses is highly augmented due to On Time Delivery. An ability to consistently deliver on time contributes to a positive brand image and can be a key differentiator for success.

There are many other benefits too such as financial savings, savings on inventory costs, competitive advantage and regulatory compliance among others.

What Causes Delay In On Time Delivery

Businesses do understand the numerous benefits of On Time Delivery for themselves and their customers, but there are various reasons that lead to delays in On Time Delivery. Let us look at the main causes.

1. Inaccurate Demand Forecasting

Inaccurate demand forecasting is one of the primary causes of delays in On Time Delivery. When businesses overestimate demand, it can lead to overproduction and there arises need for storage and chances of wastage.

On the other hand, when demand is underestimated, it can lead to stockouts and potential delays while waiting for replenishment. Both of these situations cause On Time Delivery delay.

2. Poor Inventory Management

Efficient Inventory management is a very important aspect to ensure On Time Delivery and poor management can throw businesses off-balance. Understocking can lead to backorders while overstocking may lead to warehouse stocking chaos. 

3. Disruption in Supply Chain

There are numerous reasons which can lead to disruption in the supply chains such as transportation bottlenecks, strikes, natural disasters and even global economic factors.. 

These disruptions cause delays in the procurement of raw materials, finished goods, distribution logistics, and fulfilment of orders, leading to On Time Delivery delays. 

4. Challenges in Transportation

Transportation challenges can severely hamper On Time and Last Mile Delivery. Some common transportation issues include delays in transportation due to traffic congestion, adverse weather conditions and breakdowns in vehicles. There can also be transportation delays due to route inefficiencies and errors in scheduling.

5. Production Delays and Quality Control Issues

In businesses such as manufacturing, production delays due to production inefficiencies, equipment breakdowns, workforce issues and quality control issues are also leading causes of On Time Delivery delays.

6. Lack of Visibility

Another reason for the delay in On Time Delivery is the lack of real-time order tracking and visibility. If there is a lack of visibility across every stage of the fulfilment process and schedule, it is difficult to accurately estimate the real cause of On Time Delivery delays. It will lead to inefficiencies in Delivery Management.

7. Unexpected  Events

Any business is prone to certain unexpected events which are beyond its control. Events such as political unrest, strikes, and global health crises such as COVID-19 can adversely impact supply chain and delivery schedules, leading to delays in On Time Delivery.

Now we know the main reasons that cause delays in On Time Delivery, the next logical section is to understand what could be the strategies to improve this delay.

8 Strategies To Improve On Time Delivery

Irrespective of the type of business, industry or sector here are the top 8 strategies to improve On Time Delivery.

1. Set Realistic and Clear Targets

The first step towards improving On Time Delivery performance is to establish clear goals and set realistic targets. These targets should be measurable, specific and most importantly attainable.

Rather than having a goal of improving the On Time Delivery rate without setting any specific target,  an example of a measurable, specific and realistic goal can be to achieve an ‘On Time Delivery rate of 95% within the next two quarters’.

By defining goals clearly and realistically, it becomes easier to work towards a measurable goal for all the employees. 

2. Implement Proper Planning and Scheduling

After setting realistic and clear targets the strategy should be to plan and schedule appropriately. It is necessary to create a detailed plan, allocate resources efficiently and set realistic timelines for execution of the plan.

Effective planning and scheduling are imperative for ensuring On Time Delivery. Software tools such as Project Management Software and Enterprise Resource Planning systems can be used to plan and schedule tasks.

3. Monitor and Measure Performance Continuously

Businesses need to monitor and measure performance continuously in order to improve On Time Delivery. By establishing a system, it becomes easier to identify areas of improvement and make decisions driven by data.

The key steps to monitor and measure On Time Delivery KPI are to clearly define delivery timeframes, capture delivery data and calculate On Time Delivery Rate Formula. On Time Delivery Rate can be calculated using a simple formula;

On Time Delivery Rate (%) = (Number of On Time Deliveries / Total No Of Deliveries) x 100

After measuring performance, it needs to be monitored continuously and various monitoring software can be used to automate data collection and reporting.

4. Clear Communication Between Departments

Any business cannot function optimally without communication and collaboration between various departments such as sales, production, marketing and logistics. It is essential to promote effective and clear communication between them to achieve On Time Delivery KPI.

It can be ensured by having regular meetings among different departments, setting cross-functional teams to focus on specific orders, encouraging open and transparent communication and using collaboration software and tools to enable communication between teams irrespective of their location. 

5. Develop a Professional and Skilled Workforce

No amount of automation can ever dilute the importance of a skilled and professional workforce. To improve On Time Delivery, businesses need to continuously train and develop their employees to enhance their skills in logistics and other relevant areas.

A culture which encourages employees to stay up to date with the latest industry trends and recognises and rewards those who meet their On Time Delivery targets is a desirable strategy.

6. Invest In Technology

There are several technology-driven strategies which should be implemented to improve On Time Delivery. Investing in technological tools and systems will play a vital role in enhancing operational accuracy and efficiency. 

Some of such technological solutions include;

• Inventory Management Systems to optimise inventory and reduce the risk of overstocking or understocking. 

• Transportation Management Software to help in route optimisation, real-time shipment tracking and ensuring on-schedule deliveries. 

• Customer Relationship Management Systems to keep track of customer orders, and communication and facilitate better coordination between departments.

• Data Analytics Software to gain insight into delivery KPIs, and operational bottlenecks and make informed data-driven decisions.

7. Streamline Supply Chain 

Streamlining and managing the Supply Chain of any business is critical to achieve operational efficiency, minimise delays and improve On Time Delivery. Some key strategies to achieve a streamlined supply chain are;

• Nurture strong and cordial relationships with suppliers.

• Diversify to reduce dependence on a single supplier.

• Implementing appropriate inventory practices such as JIT.

• Optimise transportation and logistics using optimisation software and implement GPS tracking and real-time monitoring of shipments.

• Ensuring warehouse and distribution efficiency by optimising the layout and design of warehouses and introducing automation wherever feasible.

• Partnering with a trusted 3PL to outsource your logistics needs and focus on your core USPs.

8. Setting Clear Expectations and Acting on Feedback 

A key component of  On Time Delivery is managing customer expectations. While it is desirable to achieve On Time Delivery 100 per cent of the time, it is not always possible. It is advisable to set clear expectations with the customers regarding aspects like delivery time, potential delays and any unforeseen conditions that may affect delivery. 

Transparent communication with the customers can help in managing expectations and preparing them for any hiccups if any. It is also very important to seek their feedback regarding their delivery experience and act on it. 

Summary 

All businesses aim to deliver their products and services On Time, every time since it is a crucial factor in determining their success and achieving customer satisfaction. However, it is neither possible nor realistic to always achieve a 100 percent On Time Delivery, as there are numerous reasons which cause delays in On Time Delivery. 

Nevertheless, there are various strategies which can be implemented to substantially improve On Time Delivery and contribute towards the success of a business across various sectors and industries.

To reduce your stress related to logistics and utilise that time optimally, get in touch with us to know how we can be of service to you.