I don't know about you, but I hate being late. However, much to my dislike, being late can often be out of your control. Take, for example, the morning commute. If you use public transport and have an important meeting scheduled you can almost guarantee your train will be delayed!
Receipt of raw materials or finished products from your manufacturing partner can sometimes follow the same course. However, there could be a number of reasons why a shipment arrives 'late' and it doesn't necessarily mean it's the supplier's fault.
Writing on LinkedIn, Steven Chan raises some important points to consider when analysing the status of your delivery receipts. He goes on to highlight the importance of ensuring communication channels between you and your supplier are consistent and clear. Having successful communication channels can ultimately ensure that any misunderstandings on delivery dates are rectified before delays (and no doubt frustration) occur.
So, if you find yourself in a situation where you and your supply chain partner have a difference of opinion when it comes to on-time delivery statistics, you may want to step back for a second to make sure you are both working to the same criteria.
On Time Delivery is a commonly used KPI (Key Performance Index) to evaluate a supplier's delivery performance based on commitment. It is part of the Master Supply Agreement between the supplier and customer. On the surface, it seems simple. Did the supplier ship when they said they would? However, there are many factors to consider. Without setting clear definitions with your customer or suppliers, it could lead to confusion and misjudge in supplier performance. Here are a few factors to consider when evaluating On Time Delivery.