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The On Time Delivery Dilemma

Some of my clients, when I first start to work with them, are struggling with their on time delivery performance. Apart from the frustration of dealing with problems constantly, the risk of losing customers is a big driver in terms of getting this issue resolved.

In my opinion there are two main ways that you can focus on this problem. They can both work, but one is more effective than the other (I'll let you guess which).

Option 1 - focus solely on despatching on time.
This is the traditional approach. It is usually linked directly with turnover targets and has the entire business looking at what can be shipped today. Of course, you do need to make sure that your orders do get despatched (I have met businesses that don't), but this option drives a behaviour that lets people take their eyes off the rest of the process. So....

Option 2 - focus on 'on time start', with a controlled process, and having one eye on on time despatches.
Having a tight process is the focus of most continuous improvement work. The difference with option 2 is that aside from appropriately managing the despatching process, the on time start of internal processes is also managed. Starting on time is a key element of delivering on time; catching up later on is always a challenge (unless you have built in lots of slack to your schedules - but who can afford to do this nowadays?) and should be avoided if you want to please your customers.

In reality there is only a slight shift between options 1 and 2, but the effectiveness of option 2 is far greater than option 1 in many businesses.

So, if your business is struggling with its on time delivery performance then why not review your general approach to managing this key performance indicator? If you're an 'option 1' kind of business then it might be worth trying out option 2.

Good luck with improving your on time delivery rate..... and winning a lot more business on the back of your excellent supplier performance.


Giles Johnston
...optimising MRP systems and re-engineering business processes
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