How do you Calculate On Time Delivery?

[Steve Prevette]

I've run into this sort of metric several times, and there are several potential pitfalls.

What I'd suggest as a primary chart is a "real time" look at delivery due dates, and were they made or not. Don't take credit for only looking at the end of the month like "I had a shipment due on 6/10, it shipped on 6/20, so today (6/30/2012) I have no overdue shipments".

Also - are you measuring "shipped by" dates, or "shipment received by customer" dates to see if it is "on time"?

So when you evaluate for the week, month, whatever, collect all the orders with scheduled dates within the time interval. Count (either by number of orders, units, dollars, whatever) the number that came due, and the number that met the commitment, and plot that percent.

Now, a gamesmanship problem with this is - once you miss a date, there is no incentive to EVER complete the delivery (at least in terms of this metric). So I usually include a metric of - number of overdue items yet to be completed, as of the end of the month. An average age of overdue items as of the end of the month may also be worthwhile.

 

[Ninja]

I tend to collect two metrics:
1. On time and late shipments in period
2. # of days late in the period

The former gives me a rough "how am I doing", and is based in the month that it was to have shipped...not the month it shipped. THis approach keeps May's shipments in May, rather than sluffing it over into June...It was to ship in May and didn't...it's May's late shipment.

The latter gives me an overall measure of "How Late?" 95% on time with each lateness being one day overdue is one thing. 99% with the one lateness overdue by 20 days is another.

This approach still can miss things, but having an 'accumulated days late in period' or 'average days late in period' (averaged only over the late count) helps to point out issues when compared to historical data

HTH.

 

[Jim Wynne]

I agree that it is quite arbitrary to pick a given period of time, but I have to use some method to catagorize our data to present to Top Management. A month seems a logical choice. As I see it now I would say, "We shipped 100 orders last month - 99 orders were shipped on time and one was shipped after the due date". This would give me a 99% delivery rating. There is no way I could go longer than a month without incuring the wrath of Management. Doing it weekly would become very cumbersome.

I think that there's some confusion in this thread between on-time shipments and on-time deliveries.

The company that's doing the shipping might want to know about ship-to-schedule for its own internal purposes, mainly monthly invoicing. They don't care so much about whether or not a thing is shipped, per se. What they want to know is how well their monthly billing is meeting targets.

The company that's receiving the shipments wants them delivered on schedule because of their own production or service needs, and they don't care whether your monthly invoicing is meeting targets or not.

You seem to be concerned about on-time shipments, not on-time deliveries, at least for the purposes of your intial query.

 

[silentrunning]

Jim, our ship dates are set ahead of the required delivery dates by the amount of time that it has historically taken orders to get to our customers. Sometimes deliveries can take longer but we are pretty close. We try to add one day just for the unexpected.

 

[NikkiQSM]

EarlyUp to -3 DaysOn-time0 daysLate> +1 Days


Total number of jobs shipped and divide the number of jobs sent that were ontime, late, and early.

That's how we track it.

 

[ssz102]

the OTD calculate is very simply
that is if you company received 100 orders this month and the customer require delivery by the end of this month,
when the early next month, you find the actually shipment is 90 orders, so the OTD is 90% last month

 

[lostmanager]

We calculate OTD by total quantity of valves from orders by total quantity of valves that were late from those orders. Our OTD is really low. Should we calculate total orders by total late orders? And do we have to provide a cushion for late deliveries, if so how long? We are a custom shop and all orders are almost different.

 

[boomergirl70]

Does anyone have an excel tool already made for ontime delivery?