KPI of the Day – Logistics: % Delivery deadlines met
Definition
Measures the percentage of service delivery requests that were met on time, out of the total amount of delivery requests.
Purpose
The indicator can be used to indicate both order delivery and project delivery timeliness. As far as logistics is concerned, it is used to monitor the quality of service delivery as an expression of operational excellence and customer satisfaction.
As far as project management is concerned, it is used to track the operational discipline in coordinating and executing a project, according to the planned schedule.
Recommendations
The indicator is used for monitoring schedule adherence and service reliability in logistics and distribution. It is highly similar to % On-time delivery and its results depend on the same factors of influence.
While % On-time delivery is calculated on the basis of the number of items which were delivered on time, % Delivery deadlines met rather focuses on the degree to which delivery deadlines were successfully honored. The KPI thus provides a broader perspective on schedule adherence and the efficiency of delivery processes.
Schedule adherence is a crucial factor for successful business relationships and for satisfied and thereby loyal customers. For best results when employing this indicator, first of all, companies must ensure that clear deadlines are set by considering all variables (such as i.e. time zone differences) and that the customer is aware of all delivery terms.
It is also recommended that the delivery processes are deconstructed in all their stages, with deadlines for each of them, by designing a Gantt chart, for example. Furthermore, for each stage, a time cushion should be built in, ensuring that deliveries are more likely to arrive too soon rather than too late.
Implementing a tracking system is an additional recommended best practice, alongside the following:
- Encouraging staff to manage their workload realistically;
- Planning as accurately as possible and avoiding over-commitment to clients;
- Taking into account illness, holidays, and other factors that may cause delays.
Even though it universally monitors timeliness in execution, the indicator can acquire specificity when it comes to the different contexts it can be applied. Such is the case with the project management and logistics industries, for example.
Whereas in the logistics industry the indicator is an expression of operational excellence, in project management, it is rather a measure of discipline and financial rigor. In both cases, however, this KPI is a leading indicator of customer satisfaction, which makes it important for organizations worldwide to track and analyze its results.
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Tags: KPI, Logistics performance
