On-time delivery OTD is the main metric to measure the efficiency of supply chain processes in your organization. It is an indicator of how capable your organization is to meet customer demand in terms of the requested delivery date RDD. Worst case? You loose your customers to competitors. Over the years we made the following observations regarding OTD.

From a diagnostic and executional perspective, it is much more powerful to measure and analyse Span, a metric developed by GE. Process performance is measured against the requested delivery date RDD at order line level, not order level.

It generates a variance-based view of each order line delivery performance. Obviously, the goal is to reduce the Span of 30 days to a minimum, bringing as many order lines to the centre line. To achieve this, the following issues need to be resolved:. The underlying root causes for the issues above are often planning and operational issues that need to be tackled in order to reduce Span.

To understand the root causes of early and late deliveries, detailed process analysis is required. Root causes need to be identified and eliminated. This often requires a paradigm shift in terms of operational and supply chain strategy.

how to improve on time delivery ppt

This benefits your customers, as they get delivered what they want exactly when they want it. On time! Are you the weakest link in your supply chain? Remote process management and monitoring — the future of managing your key business processes.

Free consultation for Covid disruption. This enables you to see and start to understand the variance […]. Blog How to analyse and improve your on-time delivery performance.

Share article. Client experience: Inventory replenishment. Related posts Show all posts. Discuss this topic? Aart Willem de Wolf Managing Partner. Email address.The good news is those expectations are usually pretty simple: orders should be shipped accurately and arrive on-time. But companies that struggle to meet other key deadlines upstream in their supply chain and during manufacturing find this to be easier said than done.

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A few examples include production delays due to material shortages, avoidable expedited shipping costs, and being overwhelmed with customer complaints. Less appreciated may be the bigger issue that regularly delivering late becomes a difficult habit to change. Different organizations measure on-time delivery in different ways. In basic terms, OTD is a calculation of the amount of shipments delivered on time to the customer in relation to the total number of orders shipped. If the number is below the benchmark, it likely means there are deeper issues that need addressed.

Poor OTD is likely just a symptom, not the core problem. And like most things, clearly defining your benchmark OTD is the first step in figuring out how to improve it. OTD for shipments within a production supply chain is a difficult metric to track, but improvement in this area has obvious value.

The arrival of materials needed for production are important because OTD is integral to the efficiency of the production line. Chart 1: Increasing efficiency of materials handling not only improves OTD, but it also reduces the overall production cost of goods. Levelling production and automating material handling through lean processes are two ways to optimize the availability of materials for production and improve on time delivery percentage.

With both approaches, each step in the production supply chain is accounted for, helping to meet internal production deadlines and keeps lines moving. For example, materials management of parts and inventory can be tracked by user, task, and location through a centralized system which provides better inventory visibility.

Upgrading to automated material handling systems means using technologies such as robotics, sorters, conveyors, and RFID barcode scanners.

In addition to increasing efficiency in supply chains to improve OTD, automated materials handling also helps improve the flexibility of supply chains, allowing companies to meet rising customer demands for customized products, and improves the safety of operationsincluding managing dull, dangerous and dirty jobs so employees can focus on more rewarding tasks.

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How to analyse and improve your on-time delivery performance

Contact a person All fields are required Please fill out the form below or call us toll free at Delivery performance metrics are a big issue that can help you drive new business. Traditional manufacturing processes were designed to handle big batches, and typically focused scheduling over long time horizons i. Lean Manufacturing shifts the focus in scheduling and planning production to the very near term.

This is because the closer your manufacturing processes are tied to meeting defined customer needs, the better chance you have of meeting the production schedule customers expect. The goal is to optimize your production schedule relative to timing and mix, and to bring it down to the smallest interval. You need to best utilize your resources to shorten lead times and continuously meet your promises.

Knowing at any given moment whether your production schedule is meeting customer expectations gives you the increased ability to meet changing customer demands. The key is that with production schedules managed to small time frames i. Lean thinking applied to your production processes will identify the one area that is the slowest point in your operation. This constraint point is also an important control point for your scheduling.

This is because the pacemaker point really controls what happens through the rest of your processes, setting the overall speed of product flow or product pull. This value is based on your quality levels, times required for machine setup, the production cycle itself, and the operating performance of the machinery machine utilization. The EPEI ultimately helps you to establish your planning horizon for your product mix.

How much capacity would that free up, and be filled with new business? Or what impact might this have on shortening lead time or increasing on-time delivery performance?

While a master production schedule gives you the broader outlook, you also need to be looking at the schedule more in real time, with shorter EPE intervals. This enables you to always know where you are in your schedule on a real-time basis. It requires a thorough understanding of your capacity as well as the management of resources creating that capacity — your equipment and your people. The right metrics help you understand where you are relative to meeting the schedule in real time.

Releasing a schedule for the week and then checking against it at the end of the week is simply insufficient.What is the most common cause of on time delivery failures?

Transportation-related snafus often get the blame, yet in many cases there is relatively little data on the root causes of missed delivery deadlines. Digging deeper into the issue will help reveal the true cause — and assist in developing the correct solution.

Sub-par performances in this area add cost, lower service levels, and generate unnecessary friction between trading partners. There are four critical steps shippers should take to address on time delivery issues check out our infographic below for a visual interpretation :.

Why are shipment arriving late? Shippers should make a concerted effort to find the root cause of late deliveries. Delve into each aspect of your supply chain to uncover the issue or issues for on time delivery issues. Create a standardized process to understand and track the reasons deliveries are late. Categorize the reasons i.

This will give you a clearer picture of your on time delivery struggles. This process can be done manually, but employing a transportation management system TMS makes the process much easier. After gathering the data for a period of time, patterns will begin to emerge.

Prioritize the issues and work with key stakeholders to develop and implement new processes and procedures to address the reasons for late deliveries.

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Focusing on actionable issues — problems that are within your control — start to implement the solutions. Monitor the results carefully and adjust if necessary. Improving on time delivery is a continuous process. It is possible to bridge the information gaps and find solutions by drilling down into the freight delivery process. How to Improve On Time Delivery There are four critical steps shippers should take to address on time delivery issues check out our infographic below for a visual interpretation : 1.

Recognize the problem Why are shipment arriving late? Capture late delivery reasons Create a standardized process to understand and track the reasons deliveries are late. Analyze the data After gathering the data for a period of time, patterns will begin to emerge. Implement solutions Focusing on actionable issues — problems that are within your control — start to implement the solutions.

Final Thoughts It is possible to bridge the information gaps and find solutions by drilling down into the freight delivery process.Too often, on-time delivery is seen as one, of many, considerations, and is treated as secondary to cost, the most common primary consideration.

World class companies have a different view. They see on-time delivery as 1 an ethical issue, i. Note: World Class companies also see delivery performance as a marketing tool. It allows them to compete on something other than price alone. How difficult is it to reduce inventory, … if there is no requirement to deliver on time?

How tough is it to cut costs? Or improve quality? On-Time Delivery is the constant unremitting standard that makes all other performance measures meaningful. In some operations, capacity planning and order promising are vital prerequisites for world class delivery performance.

However, in most corporations, i. Note that in all of these circumstances, management made the decision NOT to be on time!

how to improve on time delivery ppt

The same is generally true for the company that IS at capacity. Seldom is it a systems issue, i. The first impact of missing your delivery promise is that it invalidates the powerful prediction tools that come from your ERP Enterprise Resource Planning system. The system expected a billing that did not happen.

We missed it. Similarly, schedule integrity has a huge impact on shop floor efficiency. Missed deliveries cause schedule disruptions, excess inventories, and expediting. All are extreme forms of waste!

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Change the culture. We discuss the moral as well as the business reasons, and explain why they will soon see a new focus on hitting all due dates. Make sure that your order promising process considers, and abides by, all available data: shop capacities, procurement availability, tooling, etc. It all begins with a reasonable schedule. Appropriate staffing levels, cross training, job rotation, etc.

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THEN, we will attack the costs associated with on-time delivery: e. Begin with the final ship date, then do the same for subassembly and fabrication completions, and finally for procurement on-time delivery. After more than twenty years and hundreds of plants, we have found that nothing drives the resolution of delivery impediments as well as corporate wide goal curves.

Do it. Do it now! In many companies, the commitment to be on-time represents a major change of operating philosophy.As you know, there are thousands of sellers offering laptop parts everywhere on the web, so I had lots of choice on who to order from. Which means that those who shipped cheaper but too slow, or faster but too expensive, were simply erased from my list. Some people will always choose the cheapest no matter what, but in general, people want to get the best bang for their buck, even if that means spending just a little bit more.

This turns a simple task into a complicated and slow process, creating frustration along the way. If your process is long and painful, consider starting again from scratch and building up something that is simple, quick, and efficient. Make it quick.

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No, make it instantaneous! It should only take a matter of seconds for the order to be processed at your warehouse or by your supplier if you use drop-shipping or similar inventory rules.

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Know the exact location of each item in your warehouse. And although manpower will always be a good part of the process, try to automate as many tasks as possible. Depending on where and how fast you will have to deliver, some services might be better than others. Check all the services that are available to you, and list their price per weight and destination.

This way, you'll just have to check your list and use the most appropriate service. My advice : not all public postal services are evil, so don't be afraid to check your local post office! EDI electronic data interchange is a technique used by many transporters that basically replaces the old paperwork with electronic data. As you can imagine, getting rid of paperwork makes the process much quicker. A lot of customs offices use this technique as it allows a much larger volume to be processed at the same time.

Do you ship to destinations outside of your own country? Get some contacts and make some connections in the destination countries so that you know which services to use, which to avoid, and what things you can prepare upfront to ensure smooth shipping. Customs clearance is a very long and frustrating sequence of the delivery process, but unfortunately there is no way to avoid it.

A good solution that more and more countries offer is to declare the goods online, even before they leave the country.

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Your parcel will then slip through customs and go straight to its destination. Believe me, that will save you a lot of time. Keeping your customers informed on the status of the delivery will make time go much faster for them.

There are always more ways to improve your delivery performanceand when it comes to your business, you should constantly keep looking for ways to be better. Remember that it's never too late to get better at something, but the most important is to keep doing well what you already do well.

While Santa's known for using reindeers and a sleigh to deliver his presents worldwide, it's worth remembering that some companies also develop their own "magical" shipping method, like that Shipping Drone that Amazon plans on using. See, there's no reason to be scared of the unknown.

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The operator answers within a few minutes. Here's something that happened to me that serves as a great example. Second, the shipping costs. And finally, the timescale. Although I wasn't in a hurry, faster would be better.

Here are 8 rules to follow to get the best delivery performance for the lowest costs. Simplify your internal processes.

how to improve on time delivery ppt

Speed up communication with your warehouse.After you enable Flash, refresh this page and the presentation should play. Get the plugin now.

Toggle navigation. Help Preferences Sign up Log in. To view this presentation, you'll need to allow Flash. Click to allow Flash After you enable Flash, refresh this page and the presentation should play. View by Category Toggle navigation. Products Sold on our sister site CrystalGraphics. Description: Quality issues on trimming process.

Each trimming location now has a 12 16 week schedule of specific parts based Tags: trp customer delivery hereford improvement performance project sealings time trimming. Latest Highest Rated. Introduction The client are manufacturers of customised and standard rubber compound gaskets for the plate heat exchanger industry. Kolding Denmark. Both APV sites had seen delivery Commitments and acknowledgement dates being unreliable and in many cases had witnessed further repetitive slippage to re-acknowledged dates.

This was then having a significant knock-on effect to the operations side within both facilities. Project Plan After an initial SWOT analysis, VA recommended a 3 month program with the following objectives Detailed COTD analysis and implementation of Improvement Action Plan Review and re-alignment of current stocking policies and parameters Formal review, measurement and alignment plan of order book adherence Introduction to the Control Room process After drilling down into the perceived issues, the VA Consultant quickly identified that there were 4 main causes impacting on the clients ability to deliver on time.

Implementation Below is a summary of the main processes introduced to drive improvement within the clients business Control Room Set up to develop, monitor and drive improvement of KPIs install broader visual management techniques throughout the site.

In order to try and understand the reasons why lines were being delivered late, we started to look at the detail behind the order lines. Continual process of daily tracking until order line is shipped. Quality Visual display boards set up to coordinate acceptable quality standards on trimming between Goldsboro TRP and also provide general quality guidelines on manufactured product.

OEE - Set up to understand where capacity losses were occurring in the Press area. ABC Product Classification Stocking Policy Introduced to try and secure availability of volume gaskets by using stock replenishment systems based on agreed rules.

During the introduction period of OEE, the recorded data showed that we were not only seeing losses through non value add activities during changeover times but also with other related processes.

This has been achieved even though many partial shipments have been made to satisfy minimum demand requirements of the customer and therefore has magnified the impact of the overdues.

The figures show less fluctuation over the last few weeks of the project.