By: Theophilus Tei AYANOU (ChMC.)
In the fast-paced world of modern business, on-time delivery has become a critical factor for success.
Whether you’re running a small local shop or a large multinational corporation, ensuring that products and services reach customers as promised can significantly impact your reputation, customer satisfaction and bottom line. Let’s explore why on-time delivery is so essential and how businesses can achieve it.
What is on-time delivery?
On-time delivery (OTD) is a critical Key Performance Indicator (KPI) used to measure supply chain efficiency.
This metric indicates whether postal and courier companies are meeting their promised delivery timelines, essential for evaluating courier performance and maintaining customer satisfaction.
Measuring OTD rates reveals the effectiveness of a courier service and brand, helping improve customer satisfaction and encouraging repeat transactions.
Challenges in achieving on-time delivery (OTD)
Delivery volumes are expanding at an unprecedented rate, making it increasingly difficult to meet delivery deadlines.
This results in missed and late deliveries, which negatively impact both customers and courier operations. A single failed delivery attempt can cause a domino effect, delaying lead times for subsequent orders on the rider’s route.
Customers with bad shipping experiences are unlikely to reorder from the same brand, making it imperative for brands, 3PL logistics providers, carriers and delivery personnel to prioritise improving OTD metrics.
Why is on-time delivery important?
On-time delivery (OTD) is a key factor in customer retention, as it significantly influences the delivery experience. Lower OTD rates lead to increased customer complaints, higher customer service costs and dissatisfied customers who may choose not to reorder.
In today’s competitive market, customers have lofty expectations and demand timely deliveries regardless of supply chain issues or inventory management problems.
According to a GreyOrange survey, 45% of consumers expect two-day shipping or less for online orders and 57% will not return to a retailer after three late deliveries. Negative reviews online and on social media can quickly damage a brand’s reputation, making OTD crucial for maintaining high customer retention rates.
Causes of late delivery
Several factors contribute to late deliveries and addressing these issues can improve OTD rates:
Insufficient address/undeliverable address: Errors or missing information in the recipient’s address can prevent delivery, leading to returned packages. Ensuring accurate and complete address information is vital.
Good address format:
- Name of the Sender/Recipient
- Name of Institution (optional)
- Recipient Address (Descriptive)
- Street Name and Number
- House/Apartment Number
- Name of the Town
- Province/City/Location
- Postcode (Foreign/Recipient Address) and (Local/Digital Address)
- Name of the destination country for foreign and region for local
- Active telephone numbers for sender and recipient (preferably mobile)
Logistical challenges: Insufficient drivers, riders and fleets, as well as long travel distances, can hinder timely deliveries. Efficient route planning and local inventory management are essential to OTD.
Delivery route issues: Proper scheduling and route planning are critical to maximising delivery efficiency. This includes loading vehicles efficiently and planning routes to minimise transit times.
Lack of visibility: Real-time order visibility and tracking are crucial for timely deliveries. Most companies struggle with visibility across the entire dispatch schedule, making it difficult to identify and address delays.
Types of on-time delivery (OTD) KPIs
Various KPIs can measure OTD, including:
- Time in fulfilment or distribution centre
- Time to deliver
- Time on site
- Time back to base
Most companies group these metrics together or fail to measure them separately, hindering efforts to improve OTD rates and reduce lead times.
Steps to guarantee high on-time delivery service rates
- Accurate Address Information: Ensure all address details are complete and accurate.
- Efficient Route Planning: Optimise delivery routes and vehicle packing.
- Adequate Resources: Ensure sufficient drivers, riders and fleets.
- Real-Time Visibility: Implement tracking systems for real-time order visibility.
- Intelligent Technology: Utilise technology to streamline operations and improve OTD rates.
A high OTD rate is crucial for customer satisfaction and intelligent technology can help businesses achieve this important KPI.
Top 3 steps to improving your OTD rate and great customer experience
Step 1: Visibility and automation
Achieving success at scale in the last-mile delivery process requires both visibility and automation. Knowing the precise location of your orders at all times allows you to identify and address issues before they escalate.
Automation accelerates the entire process by streamlining as many steps as possible. The more steps that are automated and the more resources connected for visibility, the higher your OTD rates will be.
Machine learning plays a crucial role in enhancing visibility. It helps businesses understand the underlying causes of late deliveries, enabling them to make informed decisions that improve OTD metrics.
By leveraging machine learning, you can gain insights into the delivery process and take proactive measures to ensure timely deliveries.
Step 2: Optimise, optimise, optimise
Optimisation is key to improving OTD rates. This involves refining dispatching and routing processes for both same-day and scheduled delivery orders.
For on-demand deliveries, dispatch software can automatically select the nearest fleet or rider – a task that software performs with greater accuracy and speed than humans.
In a just-in-time delivery model, it is essential to measure and fine-tune every stage of the process. For scheduled deliveries, delivery companies can use intelligent delivery route optimisation software that considers all relevant factors when planning time and distance to each location. This ensures that packages consistently arrive by the promised delivery date.
Step 3: Flexible coverage
Flexibility is vital for maintaining high OTD rates. Ensure you have backup options, such as additional delivery agents or vehicles, to manage unexpected situations. This flexibility guarantees that on-time delivery service is maintained regardless of the circumstances.
Conclusion
In today’s fast-paced world, on-time delivery is more than just a metric; it is a promise to customers, a testament to operational excellence and a cornerstone of brand loyalty. Achieving high on-time delivery rates is a shared responsibility that requires collaboration, innovation and dedication from all stakeholders involved.
From ensuring accurate address information to optimising dispatching and routing, every step in the delivery process plays a crucial role in meeting customer expectations.
Leveraging technology, such as machine learning and intelligent route optimisation, can transform the delivery landscape, making it more efficient and dependable.
Ultimately, on-time delivery is about creating a seamless and satisfying experience for customers. It is about building trust, enhancing customer retention and setting your brand apart in a competitive market.
When every stakeholder – from the delivery personnel to the logistics managers – embraces their role in this shared responsibility, the result is a robust and resilient delivery system that delights customers and drives business success.
Let us commit to making on-time delivery a priority, not just a goal. Together, we can turn every delivery into a moment of satisfaction and trust, ensuring that our customers always receive their orders on time, every time.
Theophilus Tei Ayanou (ChMC.)
Chartered Management Consultant
Courier & Postal Expert
Email: [email protected]
