Blog Post
Ensuring timely order fulfillment is crucial in a market where customers expect shipments to arrive promptly and in full as standard. However, achieving this goal can be challenging, as unforeseen delays can disrupt supply chains for a myriad of reasons, leading to increased costs and customer dissatisfaction.
By committing to on-time delivery, businesses can enhance their logistics operations through advanced tracking systems, optimized routing, and clear communication to minimize the impact of any disruptions.
Read on to learn more about how on-time delivery practices address the issues that can lead to delays, ultimately enhancing efficiency, strengthening customer relationships, and promoting brand loyalty.
What Is On-Time Delivery?
On-time delivery refers to the ability to transport and deliver goods to their intended destination within the promised or expected timeframe. It requires coordinating various logistics processes to meet customer expectations consistently and is an important component of perfect orders.
What's the Role of On-Time Delivery in Logistics?
Consistently meeting delivery expectations ensures a smooth fulfillment process for your distribution department. Customers appreciate prompt service, leading to greater loyalty and satisfaction over the long run. Timely shipping also prevents potential costs associated with delays. Let's take a closer look at some of the most important ways on-time delivery helps your business thrive:
- Enhance Customer Satisfaction: Delivering orders as promised demonstrates your commitment to meeting their needs, building trust and loyalty over time, and increasing CSAT.
- Strengthen Brand Reputation: Satisfied customers feel confident purchasing from a reliable brand and can become your best advocates. Consistently meeting delivery windows becomes a competitive advantage.
- Reduce Operational Costs: Delays incur unnecessary expenses such as additional storage fees or expedited shipping charges. On-time fulfillment avoids these costs and minimizes potential financial penalties associated with missed deadlines.
- Improve Supply Chain Efficiency: Punctual order fulfillment optimizes inventory levels, production schedules, and resource allocation, allowing for smoother management across your entire operations.
- Support Expansion Plans: As your business grows, maintaining consistent, timely deliveries supports your ability to scale while still satisfying customers.
- Improve Cash Flow: Customers who receive orders on time are more likely to pay invoices promptly, contributing to better cash flow management for reinvesting in your company.
Compugen faced significant challenges with its manual sales order process, which was time-consuming and error-prone. To address these issues, it implemented Conexiom's Sales Order Automation solution, enabling the company to automate 3,500 monthly transactions. Thanks to Conexiom, Compugen achieved high data accuracy in its automated orders and a remarkable 400% return on investment (ROI).
What Key Performance Indicators (KPIs) Should Be Tracked for On-Time Delivery?
Monitoring the right KPIs helps identify areas to focus on to support operational improvement and ensures the smooth running of your supply chain. Let's examine the essential KPIs for on-time delivery:
- Time in Fulfillment or Distribution Center: Measures how long it takes for an order to be picked, packed, and processed within your facility before dispatch.
- Delivery Duration: This metric tracks how long an order travels from your distribution center to the customer's address.
- Time on Site: Represents the length of time an order spends physically at the delivery location during handoff.
- Return Time: Covers the round-trip time for delivery vehicles, including loading/unloading.
- Delivered in Full, On Time (DIFOT/OTIF): The in full, on time KPI shows the percentage of complete orders delivered by the promised date.
- Inventory Turn: This metric calculates the frequency at which inventory is sold and replaced over a set period, such as a year.
How Do You Measure On-Time Delivery?
Start by counting the total number of orders shipped within a specified timeframe. Then, count those that you delivered by the stipulated date. Divide the on-time orders by the total orders and multiply the result by 100 to convert it into a percentage.
For example, let's say your business ships 200 orders in a given month, and 180 of those orders arrive on or before the expected delivery date. The on-time delivery rate would be:
(180 on-time orders / 200 total orders) x 100 = 90%
In this case, your on-time delivery performance for that period is 90%.
Regular application of this formula allows you to easily monitor and assess how well your company meets its delivery commitments.
6 Ways To Achieve A High On-Time Delivery Rate
Streamlining operations by addressing specific factors like planning, tracking, teamwork, and additional logistics functions sets your business up for success. Here are six key ways to enhance your on-time delivery rates:
- Optimize Transportation Planning
Use advanced mapping software to design efficient routes that minimize distance while servicing all stops. Strategically assign loads to trucks based on drop-off locations to reduce unnecessary travel, and then develop a detailed schedule with estimated arrival times for each stop. - Implement Real-Time Tracking
Deploy telematics devices in delivery vehicles and on high-value assets to monitor locations in real-time. Set up software alerts to flag potential delays and maintain a roster of backup drivers ready to assist delayed vehicles. Also, offer your customers the ability to track their orders online. - Collaborate with Suppliers and Carriers
Through documented agreements, establish clear expectations with your suppliers and carriers regarding order volumes, communication protocols, and performance metrics. - Use Advanced Analytics
Harness data from past deliveries to identify inefficiencies such as congested routes or underperforming assets through visual dashboards and comprehensive reports. Collaborate with your team to test optimized strategies and continuously monitor key metrics to evaluate the impact of process changes. - Invest In Skilled Workforce
Provide comprehensive training to your logistics team on topics such as efficient load planning and maximizing the benefits of technology tools. Recruit experienced managers to guide employees, monitor key performance indicators, and make data-driven decisions. This investment in human capital will continually strengthen your on-time performance and customer satisfaction. - Automate Processes
Implement automation solutions, such as automated document handling, to streamline order processing, invoice handling, inventory management, and other logistics tasks. Automated workflows for order processing, inventory updates, and other routine operations reduce errors and free up staff for more strategic roles, ultimately improving overall efficiency.
Why Conexiom Is THE Best Solution For Ensuring On-Time Delivery
Consistently meeting customer expectations for on-time delivery requires strategically optimizing your logistics operations. You can strengthen performance in this important area by focusing on transportation planning, real-time visibility, collaborative partnerships, data-driven processes, and automation improvements.
Conexiom is trusted by over 600 clients to achieve efficient order processing, including 16 of North America’s 20 largest distributors and manufacturers with combined revenue of over $1.5 Trillion.
As a leading cloud-based platform, Conexiom processes millions of documents annually for customers. Some key benefits include:
- AI to Make Order Processing Easy: Turn emails from customers and suppliers into fast, accurate digital transactions with the most innovative AI platform for manufacturers and distributors. AI-powered validations and corrections turn even flawed POs into perfect orders.
- Full digital adoption across PO-backed sales orders: With Conexiom, your customers never change how they place orders. 100% of P.O.-backed orders can now be digital. Customers continue to send you PO docs and Conexiom AI turns them into digital transactions.
- Satisfied Suppliers: 44% faster invoice processing times means you keep goods flowing to your customers and avoid late payment penalties.
- More Perfect Orders: Enjoy 33% fewer missed delivery dates by digitally automating inbound purchase orders.
- Improved Customer Satisfaction and Upsells: Double the capacity of your customer service team so they can do more of what they do best.
- Reduced Order Errors: The average total cost per order error is $18,000. Cut errors in half with Conexiom.
- Lowered Processing Costs: Lower the costs of processing and fulfilling sales orders, supplier invoices, and more by 30%.
- Efficient ERP Integration: Conexiom enables quick and accurate automated data to flow into your ERP systems in under 2 minutes, eliminating manual data entry workload for your employees.
- Quick Enrollment for New Customers: The platform makes it easy for non-EDI customers to benefit from the same smooth service as experienced EDI users.
- Significant ROI: Customers consistently report over 400% return on investment, thanks to Conexiom's automation of labor-intensive tasks.
- Rapid Implementation: Your business can be up and running with this solution in as little as 30 days to start benefiting quickly.
Learn more about how Conexiom helps you delight customers, win new business, and expand profit margins.