On-Time Delivery and Customer Satisfaction
May 05, 2021
Possibly the biggest challenge for any delivery or logistics organization is keeping up with increasing customer demands. On-time delivery (OTD) performance is one of the key areas that impact the customer experience. Getting on-time delivery right is essential for happy customers, but it also plays a role in the production efficiency and material handling of a logistics chain.
Getting OTD right is necessary for the entire delivery chain. This is a process that is crucial for customer satisfaction - particularly in today’s climate of consistently rising customer demands.
Organizations need to understand their on-time delivery processes, potential weaknesses they might have in this area, and how to improve this with the right last-mile delivery software. We will explore all of this in our guide below.
What is on-time delivery?
So, what is on-time delivery and why is it so important to delivery organizations?
Quite simply, on-time delivery is a metric that businesses use to measure their success in delivering shipments within the correct time frame.
Businesses promise a certain date of delivery which they absolutely need to fulfill for customer satisfaction. OTD is about looking into this and making sure that businesses are hitting their KPIs in terms of delivery timeframes.
OTD is calculated by taking the number of customer orders and comparing this to the number of orders shipped on or before the specified delivery date. OTD is generally offered as a percentage, and it can be continually measured to keep track of an organization’s performance. If the results are below expectations, there is a good chance that the organization has bigger issues hiding somewhere in its operations.
On-time delivery may seem like a pretty straightforward metric, but it is an essential KPI to hit for successful deliveries. This is a factor that can influence a major part of the customer experience and processes that follow in any delivery network.
Why is on-time delivery important?
On-time delivery is one of the most crucial metrics for happy customers and organizational efficiency. First of all, deliveries need to be shipped on time to increase the reliability of a business. This is necessary for a better relationship between the customer and delivery business. If deliveries are reliable and on time, the customer will be satisfied. Building strong customer relationships is necessary for long-term success.
When you specify a delivery date to a customer, they expect you to meet that promise. Especially in today’s world of booming e-commerce, customer expectations are high and there is no wiggle room available.
Customers expect faster and more efficient deliveries more than ever before, so if your business does not meet their demands, customers will seek out an alternative. This can create a big impact on your business’s reputation.
OTD affects more than just customer satisfaction and meeting consumer demands. If orders are not delivered on time, then the rest of the delivery chain can be affected. This can have a major impact on the entire system of operations within the business.
On-time delivery also has a chain effect. If a delivery driver is out on a route with multiple delivery stops, then they will need to fulfill each delivery on time. However, if one delivery is thrown off course and delayed, every stop that follows will be affected. Organizations need to get OTD right for every single order; otherwise, the effects could snowball into a much larger problem with greater consequences.
Requirements for successful on-time deliveries
To get your shipments delivered on time, there are various factors and processes that should be met. These include:
All demand estimates are properly forecasted and materials ordered.
All materials need to be received and placed into inventory. Everything needs to be available for your organization to be able to fulfill orders and offer an live ETA to customers.
All inventory is in place and meets the right level of quality for deliveries to take place. This should be kept in the storage area, ready for orders.
Orders are placed, the inventory is chosen, and sent off for shipping. All necessary documentation needs to be prepared.
The delivery is scheduled and sent off.
The order is delivered on time and OTD is achieved.
It’s not always easy to meet all of these requirements.
Why deliveries run late
When managing on-time delivery, you have to understand some of the possible reasons why deliveries might run late. We have listed some common reasons below:
Issues resulting from maintenance
Over-promising on sales
Mistakes or inaccuracies with inventory
Delays with suppliers
Production operator errors
Poor delivery scheduling
Late pickups for deliveries
Complications and delays during delivery routes
Customers changing orders
As you can see, there are various potential reasons for late deliveries. Being aware of what could happen can help you to plan for any possible setbacks or even avoid issues entirely.
How to improve on-time delivery in your organisation
To improve on-time delivery, an organization should look for the root cause of the issue. Often, the main underlying issues are overlooked. Deeply analyzing operations to find and eliminate the root cause is the most important approach to improve on-time delivery. Here are the steps to manage OTD issues:
Find the exact reason why deliveries may be running late. Take a thorough look into any factors that will be adding to potential late deliveries.
Once the cause of the issue has been found, you will need to apply the correct steps to fix this. Prioritize the steps necessary for overcoming OTD issues.
Put together your plan to optimize deliveries and start to apply it to regular operations.
Gather data and analytics on the new delivery system, monitor these results, and adjust the plan to ensure success.
Following these simple steps, you will improve your OTD significantly.
6 Ways to optimise deliveries for better OTD
Once you have identified on-time delivery issues within your organization, you will need to correct them. Whether you want to avoid issues from happening or need a solution to existing issues, various steps can be taken to achieve this. We have listed 6 common approaches below to optimize deliveries for better timing.
1. Use the right software to automate processes
One of the most common reasons for OTD not meeting its targets comes down to human error. No matter how experienced and skilled a person may be, there is always the risk of human mistakes. This is why software is essential for organizing deliveries and arranging them with maximum efficiency.
Transport management software can be used to automate time-consuming and difficult tasks. This gives logistics managers more time to focus on important tasks, and it allows organizations to take on larger workflows. By automating small, tedious processes, logistics managers can spend more time looking into the specifics of each delivery.
On top of that, software can be used to make operations more efficient and more accurate. It can be used to avoid unnecessary mistakes, and ensure that all data is entered correctly. The right delivery software saves time and effort, resulting in enhanced deliveries that can meet their targets easier.
2. Efficient order tracking
If you want to make sure that your deliveries are being shipped on time, then tracking them is essential. This is one of the easiest ways to stay up to date with order progress and keep an eye on how efficiently the delivery route is working.
Tracking orders will help logistics managers to see where the order may be compromised, and make a solution to fix this as it happens. Effective order tracking should be done in real-time to be able to respond to any possible delivery issues as they happen. This will help to improve various small issues that could affect on-time delivery.
Good delivery software should offer efficient order tracking tools to help with this. This is generally represented through a map that offers a real-time image of the delivery status. This map can be accessed by logistics managers to follow the progress of the delivery route and identify any possible barriers to OTD.
Order tracking maps can also be accessed by customers to enhance their experience. This helps customers to understand where their order is, and to anticipate it as it is being delivered. If there is an issue that affects the delivery time, customers will probably be less upset if they were able to track and anticipate this change.
3. Optimize routes
One of the easiest ways to hit your on-time delivery KPIs is to use software that can optimize delivery routes. Route management software offers massive benefits to any logistics business. This software can perform at a far more advanced rate than humans can, being able to completely optimize all delivery routes for maximum efficiency and speed.
Route management software will consider all deliveries, and automatically assign these deliveries to an appropriate vehicle and an appropriate route. The software will consider all of the different variables that may affect the pace of delivery, and it will use this data to assign deliveries as efficiently as possible.
For example, some factors that may slow down the delivery include the weight of the package, the size of the package, the size and limitations of the vehicle, the speed of the vehicle, traffic, route restrictions, and so on. There are loads of factors that could influence the speed of delivery, and managing these manually can be exceedingly difficult.
By making sure that each route and each vehicle is on a completely optimized delivery path, less time is wasted and there is less risk of delivery routes being compromised. This results in faster, more reliable deliveries that hit their OTD requirements.
4. Instant notifications
Using delivery management software that can send out instant notifications is important for efficient management and tracking of delivery routes. Logistics managers can receive automated notifications in real-time to track the entire delivery cycle. This allows them to stay up to date with each stage of the delivery process as it happens, without having to worry about inaccurate communications.
Instant notifications can allow logistics managers to notice any possible irregularities or issues that may affect the delivery time. Notifications can also help to predict a more accurate and realistic delivery date - resulting in on-time delivery that works.
Measuring your on-time delivery metrics is important, but you can only do this efficiently when you have access to the right data. To improve OTD results, you will need to use software that offers plenty of accurate data and analytics tools. Use these analysis tools to come up with reporting that can be used to measure your KPIs.
If you aren’t using accurate delivery software to gather data on each delivery, then measuring your on-time deliveries can be a real challenge. You could gather inaccurate results or lack definitive information. Be sure to use software that offers a complete spread of precise data from each delivery.
6. Tracking each step of the process
An entire production chain involves multiple steps. One centralized system should be used to track each step of this process for better inventory management. Automated material handling systems will make a big difference here, increasing the efficiency of supply chains and improving OTD.
By maintaining an effective tracking inventory throughout the entire chain and staying up to date with progress, you will be able to form a much clearer picture of OTD. Automating material handling can provide multiple benefits, such as improving the flexibility of supply chains.
On-time delivery is the most important factor for customer satisfaction when it comes to logistics. If delivery is running late, this will have a major impact on the reliability of the delivery service, as well as the operations to follow. Carefully monitoring OTD and implementing the correct measurements to improve it is vital for successful delivery service.
This is where delivery management software is important. Businesses need to utilize the right software to properly monitor orders, efficiently plan routes, clearly communicate, and stay up to date with accurate reporting. Good on-time delivery rates lead to happy customers, and happy customers result in a more successful business.