by How can a manufacturing company improve its on-time delivery?
That is the question.
One of the most important KPIs is on-time delivery because it is directly related to customer satisfaction and influences customer decisions about whether or not to repurchase your product in the future.
So, it is very appropriate to dig deeper into what are the most effective ways to improve on time delivery.
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Table of Contents
Definition of On time delivery (OTD)
Simply put, on-time delivery is an effort to keep customers satisfied by meeting promised commitments related to delivery date and product receipt into their hands. OTD is a common abbreviation for this KPI.
How to Achieve a 100% KPI Target for On-Time Delivery
There are numerous factors that influence on time delivery performance.
Without further ado, let’s look at some KPIs that can help you achieve 100% on-time delivery and the steps you can take to ensure you achieve them.
Create a mindset and make being on time a priority
You must ensure that it is deeply embedded in the culture of your organization.
You must create an environment in which everyone on the team believes that late delivery is unacceptable.
As a result, they will do their best to remove obstacles, solve problems, and keep their promise to deliver products on time to customers.
Implement key performance indicators (KPIs) to track on-time delivery and make sure they are visible to everyone in the organization.
And, most importantly, the KPI must determine whether or not the product in question is delivered to the customer on time. Remember that the benchmark is when it reaches the customer, not when it leaves your production facility.
This ensures that the entire supply chain, not just the production side, is involved.
Customers are unconcerned about when you ship the product they ordered. They only care if they can get their hands on it. This is especially true if they are also involved in lean manufacturing.
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Make sure your inventory data is accurate
You must ensure that your purchasing and receiving inventory processes are robust and error-free.
Use cycle counting to ensure that your main inventory items are available before manufacturing orders are released to the production floor.
You certainly understand how bad it is when you begin production but suddenly run out of stock without warning?
As a result, setting KPI inventory accuracy is critical to avoiding this situation.
Make and stick to realistic production schedules
You must be aware of your production capacity. Create a production plan based on that capacity.
Of course, the capacity can be increased if necessary.
However, make certain that the increased production capacity is intended to support realistic and achievable sales volumes. Otherwise, you’ll just have unused capacity.
So, share this production capacity information with the sales department so that you can balance the current workload and run the factory efficiently.
It would be ideal if you could have a KPI that measures how much of your production capacity is being used.
It can also help you improve your customer service delivery times.
Make quality a priority and an integral part of your company’s culture
Who wants to accept defective goods?
It is pointless to send the goods on time if the goods received by the customer are defective in production.
And if you don’t start with high-quality products, you won’t be able to deliver and ensure customers receive their orders on time.
Why?
Because you will spend more time reworking, reworking, and reworking. And that activity will take up a lot of your time and energy.
As a result, make sure you have KPIs in place that measure the quality of your products.
If you can maintain the quality of your production, you will automatically be able to meet your customers’ delivery deadlines.
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Keep track of your efficiency level
Overall Equipment Effectiveness can be used to assess your operational efficiency.
This KPI will assess the overall effectiveness of the production equipment or line.
Availability X performance X quality.
This is a great KPI to ensure that your factory is running efficiently so that you can meet the promised delivery schedule and dates.
A streamlined production process will enable you to accurately predict on-time delivery performance in near real-time.
Collaborate with your suppliers and cultivate strong relationships with them
Create a scoring system for your suppliers and track it as one of your key performance indicators (KPIs).
What should be evaluated?
Price, product suitability with specifications and quality, response speed, lead time, and their willingness to keep inventory to meet your needs are all factors to consider.
Customer service is another factor to think about.
However, before you do so, ensure that your on-time delivery target reaches your supplier so that they are aware of your expectations for them.
Maintain happy and well-trained employees
It could be argued that finding the right people to join your organization is extremely difficult.
As a result, it is critical to have the proper recruitment process in place in order to hire the right people.
Also, make certain that you provide them with the necessary training while also ensuring that the work environment in your organization makes them happy and connected.
People who enjoy coming to work and collaborating with their coworkers are more likely to stay.
So make certain that you do so.
Another thing to remember is to listen to your employees’ suggestions for improving the organization’s on-time delivery.
Celebrate and reward those who have made a significant contribution to your success in providing 100% on-time delivery to your customers.
Physical rewards can also be given. Whether it’s in the form of souvenirs or vouchers.
Above all, include KPIs for on-time delivery in key personnel performance evaluations.
Conclusion
On-time delivery to customers cannot be achieved on its own.
There are numerous factors, functions, and people involved.
As a result, make certain that you cover all of the necessary aspects.
Making on-time delivery a priority in your annual planning session will greatly assist you in retaining the valuable customers for whom you have worked so hard.
If you have any additional suggestions, please leave them in the comments section.
I hope you find it useful!
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