Difference between revisions of "DP13"

Latest revision as of 14:48, 10 June 2017

Orders On-time Ratio measures the ability to deliver products and services on-time. On-time is measured by comparing the actual delivery date to the target date. OpenReference recognizes three target dates companies target depending on industry, supply chain configuration and maturity:

• Latest commit to the customer - Typically the target date is the Current Scheduled Delivery Date. This is typically the easiest target. It ignores what the customer requested and what was originally promised to the customer
• Original commit to the customer - Typically the target date is the Original Scheduled Delivery Date. This target date ignores what the customer requested (including unrealistic requests). It does measure a company's order promising accuracy.
• Requested by the customer - Typically the target date is the Customer Requested Delivery Date. This target date ignores constraints of the supply chain, but provides insights in whether the supply chain network configuration is aligned with customer expectations.

An order is considered on-time if all items were delivered on or before the target date. The margins that define on-time (hours/days early and hours/days late) should be based on the customer's definition of on-time.

Calculation

where

• Delivered On-time = 1 (one) if all items delivered were on-time, 0 (zero) if one or more items were too early or too late
• n = Total number of orders or order lines delivered

Unit of measure: %

Importance

A higher percentage results in less corrective actions, such as returns, late delivery penalties, demurrage, detention

Notes

Measuring late deliveries is the most common application of this metric. The impact of too early delivery attempts should not be ignore in some industries. The specific interpretation of On-time should therefore also include the customer's definition of too early.

5.00

(one vote)