Your company may not operate on the same scale as Amazon, but in the B2C market, the e-commerce giant’s standards for On-Time, In Full (OTIF) delivery have become the benchmark for consumers. The rapid pace at which consumer goods are shipped has also significantly raised customer expectations within the B2B realm. In this context, careful monitoring of your On-Time Delivery KPIs is critical to success. Read on to learn which OTIF metrics to track and discover how automation can help you uncover and address bottlenecks in your ordering process, increase accuracy, and ensure timely delivery.

What Are On-Time Deliveries?

On-time delivery is the process of fulfilling customer orders successfully within agreed timelines. It’s a primary metric within the manufacturing and distribution sectors, measuring the share of orders that reach customers on or before the promised delivery dates.

Though it might seem straightforward on paper, the reality of achieving consistent on-time deliveries is far from simple. There's often a disconnect between how a seller thinks about on-time delivery compared to how a buyer views it. The process is complicated by a variety of factors that can create a gap between what's possible and what the customer expects, such as order processing bottlenecks and inaccurate data entry. For example, if a customer places an order but it takes nine hours to process, by the time the fulfillment process begins, from the customer's perspective, on-time delivery is already impossible.

What Is the On-Time Delivery Formula?

On-time delivery is calculated by dividing the number of your orders shipped on time by your total number of orders and then multiplying the result by 100 to express it as a percentage. For example, if your company ships 150 orders in a month and delivers 120 on time, the calculation would look like this:

(120 / 150) x 100= 80%

So, in this case, your on-time delivery rate is 80%.

This equation provides you with a clear and direct means of tracking your efficiency in fulfilling your delivery promises.

Why Is On-Time Delivery so Important?

With the consumer e-commerce boom raising the bar for on-time delivery expectations in the B2B sector, failure to meet these standards can result in customer dissatisfaction, the loss of business opportunities, and damage to your long-term prospects.

Boosting your On-Time Delivery KPIs is fundamental to shaping your business’s professional image. It not only cements your company’s reputation for reliability and operational efficiency but also strengthens your relationships with suppliers and partners, showing your commitment to timely fulfillment across your supply chain. Ultimately, focusing on improving your order management systems gives you a competitive edge and enables you to seize new opportunities.

Rexel enhanced its ordering process by using automation to minimize errors and rework and reclaimed thousands of hours to refocus employee time on improving the customer experience and securing new business.

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What Are the Factors That Prevent On-Time Delivery?

While maximizing your On-Time Delivery KPIs offers many benefits, achieving this is a never-ending mission. To understand the challenges, let’s take a closer look at some of the obstacles to boosting your On Time, In Full targets:

• Inventory Management Issues: Poor inventory management that leads to stockouts or excess stock can harm your On-Time Delivery KPIs. Stockouts mean you can’t provide customers with what they order and overstocking uses up resources and slows down picking, packing, and shipping.
• Ineffective Planning and Scheduling: Failures in planning and scheduling can create bottlenecks in production and delivery, leading to delays.
• Communication Breakdowns: Miscommunications between teams, suppliers, or partners can result in incorrect or delayed orders.
• Customs and Regulatory Delays: Inaccurate or incomplete documentation can cause hold-ups in customs, leading to fines or impounded goods and delayed deliveries.
• Inaccurate Shipping Information: Errors in orders or shipping details can lead to misrouted or returned shipments, increasing delivery times and hurting your KPIs.

Inaccurate data is often at the root of challenges in inventory management, planning, scheduling, communication, regulatory compliance, and shipping. Manual processes for handling critical business documents and data entry are tedious, repetitive, and time-consuming tasks. These are the perfect conditions for introducing human error into your information chain. Even small inaccuracies can lead to a domino effect, with each error magnifying the potential for delivery delays and customer dissatisfaction.

Order automation allows you to replace human labor with AI and Machine Learning-powered solutions that reduce data entry errors, streamline order processing, and enhance the accuracy of your inventory and shipping information.

Conexiom’s automation solution enabled ADI Global Distribution to slash order processing times from hours to minutes, virtually minimize errors, and boost its On-Time Delivery KPIs. These efficiency gains also enabled the company to reallocate 142 labor hours per day toward enhancing customer service.

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What Are the Most Useful On-Time Delivery KPIs to Track?

If you’re aiming to optimize your on-time delivery performance, monitoring the following KPIs will provide you with invaluable insights to inform your decision-making and fine-tune your operations:

• Time in Fulfillment or Distribution Center: Measuring this metric helps you identify bottlenecks and optimize your warehouse operations for faster order processing and dispatch.
• Time to Deliver: This KPI is essential for assessing the overall efficiency of your delivery process, from order placement to customer receipt.
• Time on Site: Knowing how long a delivery vehicle spends at a customer's location aids in route optimization and ensuring prompt service.
• Time Back to Base: Measuring the time it takes for delivery vehicles to return is useful for scheduling and managing transportation costs.
• Delivered in Full (DIF): DIF tracks the percentage of orders delivered complete with all items, enabling you to evaluate order accuracy and minimize the risk of incomplete deliveries or backorders, vital for customer satisfaction.
• Delivered in Full, On Time (DIFOT/OTIF): Combining punctuality and accuracy, DIFOT or OTIF measures the percentage of orders delivered complete and on time. This offers a holistic view of delivery performance that considers both timeliness and accuracy.
• Inventory Turn: By indicating how often inventory is sold and replenished within a specific period, this metric aids in inventory management. Understanding the patterns of stock turnover and identifying slow-moving items lets you fine-tune inventory to avoid stockouts or overstocking.

Trust Conexiom to Help You Maximize Your On-Time Delivery KPIs

Conexiom’s solution can help you improve your On-Time Delivery KPIs across the board. The 100% accuracy of Conexiom’s touchless sales order platform minimizes the errors and inefficiencies related to manual data entry, enhances the precision of all your operations, and accelerates the ordering process.

Discover the transformative impact of Conexiom on your sales, order processes, and On-Time Delivery KPIs and unlock the potential of automation for your business today.

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