Keep in touch and stay productive with Teams and Officeeven when you're working remotely. Key performance indicators KPIs are visual measures of performance. The KPI gauges the performance of the value, defined by a Base measure also known as a calculated field in Power Pivot in Excelagainst a Target value, also defined by a measure or by an absolute value.
How to Meaningfully Measure On-Time Delivery of Anything
If your model has no measures, see Create a measure. Learn more about KPIs below, and then continue reading in the section that follows to see how easy it is to create your own KPI. A KPI is a quantifiable measurement for gauging business objectives. For example, the sales department of an organization might use a KPI to measure monthly gross profit against projected gross profit.
The accounting department might measure monthly expenditures against revenue to evaluate costs, and a human resources department might measure quarterly employee turnover. Each of these is an example of a KPI. Various business professionals frequently group KPIs together in a performance scorecard to obtain a quick and accurate historical summary of business success or to identify trends.
A KPI includes a base value, a target value, and status thresholds. A Base value is a calculated field that must result in a value. This value, for example, can be an aggregate of sales or the profit for a specific period. A Target value is also a calculated field that results in a value—perhaps an absolute value. For example, a calculated field could be used as a target value, in which the business managers of an organization want to compare how the sales department is tracking toward a given quota, where the budget calculated field would represent the target value.
An example in which an absolute value would be used as a target value is the common case of an HR manager needing to evaluate the number of paid-time-off hours for each employee—and then compare it the average.
The average number of PTO days would be an absolute value. A Status threshold is defined by the range between a low and high threshold. The Status threshold displays with a graphic to help users easily determine the status of the Base value compared to the Target value.
Create a KPI Follow these steps:. In Data View, click the table containing the measure that will serve as the Base measure. If necessary, learn how to Create a base measure. Ensure that the Calculation Area appears. In the Calculation Area, right-click the calculated field that will serve as the base measure valueand then click Create KPI.
Select Measureand then select a target measure in the box.A logistics dashboard allows for the monitoring and reporting on important logistics KPIs concerning warehouse operations, transportation processes and the overall supply chain management.
It is a modern analytics tool that helps to visualize and optimize logistics operations through advanced data analyses. Open Transportation Dashboard in Fullscreen. To manage all the ebbs and flows of your business, you need to track essential metrics that you can then visualize on a logistics dashboard. Tracking these metrics is a hard but necessary task you need to do to improve your on-time final deliveries and ensure customer satisfaction. On the logistics dashboard template provided above, five metrics are displayed, each bringing valuable information to the transportation management.
Monitoring your Loading Time and its Weight is a primary KPI to measure, as it will impact the rest of the transports efficiency. Knowing how long it takes your fleet to be loaded according to its weight will let you evaluate a certain time per ton and set targets of loading time. Optimizing this time will consequently let you load more and transport more; but keep your targets realistic, as a rushed shipment often turns into a crushed shipment.
Monitoring it over time will also enable you to identify trends and patterns that can translate a certain difficulty or on the contrary a greater efficiency; it can also give you insights on the functioning of your supply chain. Acknowledging this data is helpful when you want to allocate resources more efficiently.
Logistics Dashboard examples
You might as well need such information to dig deeper and categorize it: which orders are the heavier and need more people to be loaded? Are there others, on the contrary, that do not require a lot of workforce but that are more time-consuming when it comes to load them? According to the answers you find, you can then take action with full comprehension of your transportation management. Your fleet and the people driving it are your number one asset.
This is why it is important to maintain it as efficient as possible, by always optimizing the utilization trailer capacity, and reducing at the same time the CO2 emissions in the environment and the fuel consumption. The management of the routes is another important aspect. They should be carried out in the timeframe originally given to your customer and with the correct order undamaged.
Without all of these checkboxes ticked, the image of your business might suffer from it. As a warehouse manager, you need to have an instant overview of your facility, and know in one glance whether your factory is meeting its goals and sustains a reliable performance.
To carry this out, you need to track the right metrics and watch the operations. We have aggregated in another logistics dashboard example several KPIs to help you out with that. Directly impacting the previous dashboard data is the On-time Shipments: if these ones are late, so will the loading be - and with the possibility of creating future bottle-necks- and so will the deliveries be as well. On-time shipment being the ratio of orders placed that are ready to be shipped within the time limit set, it is important to bring it as close to the hundred percent as possible.
It indeed measures the performance in the management of your supply chain; if this metric is too low, that may translate trouble in the process between order placement and shipment, due to an increased demand that cannot be answered, or to planning processes that are not up-to-date for instance.
Having a perfect order rate as high as possible will ensure satisfied customers that will come back to your services, and guarantee them to friends and family. It is on time, neither damaged nor inaccurate.
If managed correctly, you will also save money in avoiding losses in returned goods that need to be shipped again. In this logistics dashboard example, you can also monitor your Operating Costs. These costs are embracing various aspects of your warehousing management, from the expenses covering equipment, energy consumed and material used, to more human-related costs like labor, shipment fulfilment and delivery.
These operating costs will give you a great overview of the expenses required to process one order, and adjust the price accordingly so that your warehouse can sustain itself. It will also help you in identify the different entry costs and their evolution over time. Comparing them to the same period a year early can be an interesting source of insight.However, there are some common characteristics.
The OTIF definition consists of two parts - on time and in full. It refers to the KPI measuring the efficiency and accuracy of delivery or logistics in the supply chain. The most common way to define in full is that the customer gets exactly the amount they have ordered.
Having calculated the OTIF KPI, you may want to consider various ways to improve it as well as increasing delivery accuracy and customer satisfaction. This is the correct way to measure and reveal the process capability, not only for management reporting but also for process improvement.
This provides the most truthful and accurate information on the process performance of your organization. Any KPI with unexpected results can be broken down to the order line level to see what went wrong. The calculation transparency and the availability of facts on the lowest level of detail leave no room for argument or doubt of the results. Some analysis examples are: requested delivery vs. To locate root causes for deliveries that delivered more than once, select the looping events for influence analysis.
One typical on time criteria is that the delivery should not be late. However, what is equally important is that it should not be too early, either.
Delivered In Full The most common way to define in full is that the customer gets exactly the amount they have ordered.
However, for example, the manufactured batch size can vary in the medical industryand the in full criteria should be defined so that the customer gets at least the amount they have ordered. Now that we have defined the meaning, let's proceed to the OTIF calculation!What percentage of time are your orders on time to your customers?
Is this percentage consistent over time? Or is it improving? Or is it declining? And how do you know? On-time delivery is almost always critical to the customer. If you cannot be on time consistently, the customer cannot plan his business. The key word in the sentence above is "consistently.
This month's e-zine examines how statistical process control techniques can be used to monitor and improve on-time performance. The first step in improving on-time delivery is defining what it is. This is not an easy task. Each customer may have his own definition of on time. You will need to develop an operational definition for on-time delivery. The Bureau of Transportation Statistics tracks on-time performance by the airlines.
Its operational definition for on-time departure and arrival is the following:. A flight is counted as "on time" if it operated less than 15 minutes later than the scheduled time shown in the carriers' Computerized Reservations Systems CRS.
Arrival performance is based on arrival at the gate. Departure performance is based on departure from the gate. So, the airplane must leave within 15 minutes of the scheduled departure time to be leaving on time. This doesn't mean that it departs any time soon after it leaves the gate. As those of you who travel know, the wait on the tarmac to takeoff can often be quite long. The plane must arrive within 15 minutes of the scheduled arrival time to arrive on time. Note that this means that they don't have to open the door.
They just have to be at the gate. Many companies rely on third-party carriers to deliver their product. In this case, the company doesn't control delivery after the product is ready to ship. Once the carrier picks up the order, it is out of the company's hands. Of course, the company has the option to switch carriers or work with existing carriers to be sure that the carrier's process is predictable.
But, the company really doesn't control the carrier. This is why most of these companies focus on on-time shipment when the order is ready to ship versus on-time delivery to the customer. Sometimes the shipment date changes. Suppose you have a customer who orders a product for shipment by October You discover that you can't make the shipment by that date, but you can make the shipment by October You call the customer and he tells you that is all right.
You ship the product on October On-time delivery OTD is one of contract manufacturing's most common measurements, but we rarely talk about how difficult it is to measure. Here's a guide to defining and measuring OTD. OTD rarely refers to a specific date; it usually refers to range of dates. In most companies, OTD refers to a range of dates defined as X days before early and Y days after late the due date.
If, for example, an item is due June 1, it would be considered on time if it arrives on any day between May 27 and June 1. The two main factors that influence the OTD window are production line requirements and cash flow. If a particular delivery is expensive, it may be planned for delivery very close to the production need date so it cannot be late.
Since it is expensive it cannot be early, so a tight window is appropriate. If an item is inexpensive and planned in bulk for example floor stock of screws it can arrive within a very wide window and be considered on time.
The key is that whatever your definition is, it is clearly understood by your supply base. If your system has the flexibility, you can set the OTD window by commodity class. It is critical to note that these windows must be coordinated with the planning lead times in ERP.
Most associated with variants of Just In Time JIT programs, pull systems are any approach that involves delivery triggered by an event. By contrast, in traditional push systems delivery is triggered by a PO date. We do not advocate the use of OTD for pull systems; the appropriate performance measurement approach is stock outs. In this situation, we suggest using blanket POs for annual, quarterly, monthly, or even weekly quantities. Set your early window to equal the performance period of the blanket.
As a starting point, you might choose to issue blanket PO line items for one month requirements.
In this case, set the early window to and the late window to 0. If you are experiencing experiencing stock outs, you will need to set the blanket window to one week. If no stock outs, you can loosen the blanket to one quarter. Measurement Factors. Reliable OTD statistics that everyone, internal and external to your organization, can count on are the only stats worth tracking. Here are some of the challenges. Working days vs.
Does 5 days early include weekends? It doesn't really matter which method you choose, as long as the suppliers understand. That said, we recommend calendar: it is intuitive, easy to understand, and most widely adopted. Whichever you choose, make sure your ERP is aligned. Often the working day or calendar day decision will effect the entire ERP planning module. Ship date vs. It's best practice to use the dock date, the date the item is received.
This the most intuitive and the most widely used. The supplier should be accountable to consider transit times when determining what ship date they will need to make in order to supply the material within the OTD window.Although every business-owner seeks "on-time delivery", the term may mean different things to different people.
For some individuals, on-time delivery refers to receiving goods from suppliers needed to assemble products. For others, it refers to providing products to end customers. In both cases, on-time delivery means getting products into the hands of those who want them, when they want them.
Do suppliers and customers both agree on how on-time delivery is measured? Here are some variables to consider:. The different ways of evaluating these metrics make it extremely important to secure a meeting of the minds and an up-front agreement, between senders and recipients. Although each of these terms has a specific meaning, they are often used interchangeably. Therefore, business owners, parts suppliers, and customers must strive to settle on the same language, to avoid confusion.
Supply AgreementsMaster Agreements, Quality Agreements, and other contractual documents go a long way in making sure there is clarity of language and meaning--across the board.
Some supply chain folks don't hold on-time delivery in high importance, because they believe end-users expect delays, as an unavoidable part of doing business. Contrarily, an optimized supply chain helps ensure reliable delivery, more favorable pricing, and a greater number of satisfied and repeat customers.
12 On-time Delivery KPIs for Successful Smart Logistics
By Full Bio Follow Linkedin. Follow Twitter. With over 20 years of experience, he is the director of manufacturing at Providien. Read The Balance's editorial policies. The number of units ordered. If a supplier delivers just 99 of units ordered, and the customer knowingly accepts this deficit, is this considered an on-time delivery? Date of delivery. If a customer expects a February 15 delivery but allows wiggle room to receive the items two days before or after that date, as long as the delivery occurs within that four-day window, is this considered an on-time delivery?
The number of line items on the order. There are various terms involved in with shipping products, including:. Continue Reading.This is the first in a series of posts looking at measuring KPIs for warehouse operations. We recently outlined the 7 KPIs to track for warehouse improvement. This series takes each and examines it in more detail. OTIF is a measure of your outbound operation that mainly measures customer satisfaction.
Essentially, OTIF measures the percentage of orders that are shipped on time in full, meaning the customer gets everything they ordered, on the day they expected to receive it. OTIF is generally used to cover the entire supply chain, and therefore, as delivery to the customer is the final step, then delivery OTIF is an indicator of performance across the whole supply chain. But the term OTIF is also used at various stages in the supply chain, preceded by the activity it describes.
Although OTIF can be used throughout the whole chain, when it is looked at as a whole, it corresponds to delivery. First off, the items being ordered need to be in stock. So to help contribute to a good OTIF figure, your buying needs to be efficiently planned.
Key Performance Indicators (KPIs) in Power Pivot
Even if the items are in stock, then there are elements within the warehouse that could prevent the order going out on time. You might have staff shortages, meaning the order may not get picked on time.
Orders need to be shipped on time, and within tolerance, to be delivered when you have promised they will. Finally, even if the items are in stock, and picked and packed and ready to be dispatched on time, then the carrier still has to get it to the customer on time and undamaged. All manner of disruptions or hindrances could affect this.
OTIF identifies where process improvements in final delivery or within the warehouse are required and where there are any stock issues. It measures the contribution and balance of all three of these aspects of your supply chain in delivering your orders to your customers on time. Although it may depend on the priorities of the customer base, a suggested good way of measuring OTIF is according to product type.
Using an ABC classification, many distributors will split their product lines according to sales:.The Best Business KPIs: On time delivery
So, when measuring OTIF, should you look at the total percentage for all your stock, or should you split it down by the ABC classification? But others argue that to measure true customer satisfaction, all lines should be examined; a customer will be just as disgruntled to not receive your best seller on time as to not receive one of your slower moving items. Some distributors will apply an appropriate strategy to their different lines, so that OTIF is not affected.
For example, delivery times for some items could be longer, or they might consider these to be special order deliveries that — when ordered with A or B lines — are stipulated not to arrive with the main shipment.
But there are too many variables and chance events that could affect this. The target needs to be a business decision based on what will be considered acceptable to the customer, considering the product or services provided. For many companies therefore, the target scores might be:. Most distributors will measure OTIF on a daily basis. And certainly, if there is a problem, it is vital that you have the figures so that you can analyse if there was perhaps an isolated issue on a certain day that then skews the figures for the entire month.
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