Difference between revisions of "DP1"

Latest revision as of 14:48, 10 June 2017

Perfect Order Ratio measures the ability to deliver products and services as promised. It is the percentage of orders delivered on-time, in-full, undamaged and defect free as a percentage of the total orders delivered.

• Damage free
• Defect free
• On-time
• In-full
• Error-free documentation

An order is only considered perfect if it meets all 5 of these 'Perfect Order' criteria.

Calculation

where

• Perfect Order = 1 (one) if all perfect order criteria were met, 0 (zero) if one or more criteria were not met
• n = Total number of orders or order lines delivered

Unit of measure: %

Importance

A higher Perfect Order Ratio indicates that the company is delivering products and services as promised. A lower percentage is an indicator that a higher percentage of deliveries require one or more corrective actions which ultimately adds costs and leads to customer dissatisfaction.

Notes

• A common calculation error is some multiplication of level-2 ratios (DP11, DP12, DP13, DP14, DP15). This is incorrect as a single order may fail multiple 'Perfect Order' criteria.
• On-time is defined as per the contractual agreement with the customer or, if absent, per the standard published service levels. There are three general on-time rules that a company may apply (listed from most to least strict):
  • Customer Request Date = The date the customer requested the delivery to take place
  • Original Commit Date = The date you initially promised delivery at order entry/scheduling
  • Latest Schedule Date = The last date you calculated and communicated
• In-full is defined as per the contractual agreement with the customer or if absent per the standard published service levels. In certain industries it is common practice to accept an amount within agreed boundaries, e.g. bulk materials in chemical and food industries. The final invoice will contain the delivered quantity (volume, weight, value component).

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