Delivery Performance is the level that measures how much the supply of goods and services by an organization has met the standards expected by its customers.
It is an important aspect of the supply chain management as it indicates the existing potential of the firm to deliver the goods on time by using the resources as planned and at no extra costs to the business.
The delivery performance is measured by the KPI (key performance indicator). Each contributing crucial factor is taken into account and overall delivery performance is estimated.
There are several factors that contribute to the overall delivery performance of a firm.
- On-time and in-full delivery from the suppliers: Once an order is placed it is equally important that the vendors provide the required items as promised without any changes in the quantity. This will ensure a smooth production process.
- Preparing proper manufacturing schedules: here, the firm will breakdown its overall production into various segments and will concentrate on fulfilling the needs of each segment to ensure uninterrupted manufacturing at all times.
- Inventory management: This is very important as it ensures that there are enough raw materials for production and also enough finished products for dispatch of customer order.
- Transportation requirements: This will help to calculate and check the number of times the logistics were right and if they were wrong, how can the business aim to correct them to ensure no further mistakes.
Once the business ascertains an optimal performance level, the firm must evaluate and take appropriate measure to maintain the benchmark as it is important for its credibility.
By creating a learning index the company will be able to identify its weak areas and stress on improving the same. Constant improvement policies will lead to an overall improvement in the delivery.
Get more definitions about Delivery performance and other ERP related terms here.