What is On Time Delivery?
On-time delivery, commonly referred to as OTD, is a useful KPI to evaluate the efficiency of a business’ logistics operations and consequently, their delivery performance. It measures the extent to which an organisation is able to meet its commitments in terms of delivery times. As you may have understood, it directly impacts customer satisfaction and reflects the reliability of the whole brand.
1 in 5 consumers won’t forgive brands who don’t deliver on time
One of the greatest challenges for businesses is maintaining high standards in terms of delivery, especially when facing large order volumes. Delays lead to customer dissatisfaction and they give a negative image of the brand. If one delivery is delayed, it can potentially disrupt the entire delivery route, leading to a backlog that can be challenging to overcome.
Therefore, monitoring your On-Time Delivery Rate is essential to understand how effective your logistics operations are and identify areas that need to be optimised.
Low on-time delivery rates can be costly for your business. In fact, delayed deliveries lead to disappointed customers. They are more likely to seek refunds, contact customer service for complaints or leave negative reviews, damaging your brand’s reputation. Moreover, logistics issues require extra efforts to make up for disruptions, which can result in extremely high shipping costs for retailers.
To retain an existing customer is less expensive than acquiring a new one, since acquiring new leads requires large investments in marketing and advertising efforts. Therefore, nurturing existing customer relationships is fundamental for a company’s long-term success.
- 45% of consumers today expect 2-day shipping or less when they buy online
- 57% of customers won’t return to shop after three late deliveries
How to improve your On-Time Delivery
Resources
Having enough carriers ready to deliver orders is essential to meet delivery times.
Delivery route planning
AI route planning is fundamental to plan the most efficient and cost-effective route for carriers. In this way, drivers can avoid disruptions along the way and follow the fastest delivery path, saving money and time. Businesses can achieve cost savings ranging from 10% to 30% or even more.
Tracking and visibility
36% of retailers struggle to deliver on time because they lack real-time order visibility and tracking. Often businesses focus on tracking orders just when they are out of the warehouse, ignoring the fact that it is just as important to monitor earlier stages. Lack of visibility across all phases of fulfilment operations is risky because it leads to inefficiencies.
It has become so important to invest in visibility and automation for the last mile delivery process. As said above, visibility helps to proactively identify any potential issues before they escalate into larger problems. Likewise, automation enables you to speed up as many steps as possible by streamlining operations and reducing processing times. This is key to improving your OTD rates.
Optimization and advanced dispatching technology
By partnering with a 3PL that has the right technology to support your business operations you can achieve high OTD rates, as well as a competitive edge in the market. For example, eLogy has an advanced dispatching software that automatically selects the best carrier, with the best rates based on each order.
Connect your systems
If you are using multiple systems to manage your ecommerce operations, coordinating information is undoubtedly problematic. By connecting and integrating all different operational areas of your business, including supply chain management, order fulfillment, logistics, and customer service, your processes will become more transparent, leading to enhanced performance.
Experience the future of On-Time Delivery with our open, connected platform!
Building a flexible supply chain
Make sure that despite seasonality, fluctuating demand and sudden market changes, your supply chain remains flexible and agile enough to adjust to changing circumstances, always able to meet customer demand.
In today’s ecommerce every second counts. Position your business as a leader in your industry with eLogy
