On-time Delivery, typically referred to as OTD in the e-commerce world, is an essential aspect of the success of any online business. On-time delivery is nothing but ensuring that the orders customers place with your business are delivered on time. Needless to say, delivering products on time has many benefits, but the most important of them all is customer satisfaction.
An online survey stated that customers love businesses that deliver their orders on time and would continue being loyal to them for future orders too. Likewise, they also said that they would stop purchasing from an online retailer after a couple of late deliveries.
This highlights the importance of on-time delivery in an online business, so let’s find out OTD and other related aspects you need to be aware of. Let’s get started:
What is OTD Rate?
The on-time delivery metric is a key performance indicator and can help online businesses analyze whether they can fulfill customer orders by the promised delivery date. OTD is mostly computed on the basis of a date range. If an order is expected to be received by, say, May 20, five days before this date, i.e., 15th to 20th May is the ideal delivery time (for most companies). If the order is delivered in this window, it can be considered an on-time delivery; even one day later, it is late.
Calculating the OTD rate is easy - you need to have data on the total number of deliveries and the number of delayed deliveries. If for every 100 deliveries, you had 20 delayed deliveries, then your OTD metric is 80%. The ideal OTD metric is 95% or above, and every online business needs to work out ways to ensure this target is achieved.
How to Ensure Good On-time Delivery Metrics?
Efficient Inventory Management
Inventory management plays an important role in supply chain efficiency. Systematic, updated inventory records are essential so that customers don’t end up ordering items that are not in stock at all - and this is one of the main causes resulting in unavoidable delays in product delivery. So rather than dealing with incessant complaints from distressed customers, it’s best to focus on how inventory management can be optimized for better on-time delivery metrics.
Find Out Ground-Level Bottlenecks
Your inventory management and delivery team work on the ground and are well aware of the different issues resulting in delayed shipping and delivery. Interacting with them can help you find out the root causes of an OTD metric that is not up to the mark and would help you figure out ways to ensure these issues are resolved.
Organized Packing of Products
A product cannot be shipped until it is packed. Packaging of products needs to be quick, efficient, and minimal to ensure the products are all set for shipping immediately. Simple things like packing multiple items in a single large box rather than multiple small boxes help boost the efficiency of packaging. Likewise, all products don’t require additional packing material - so segregate items according to their nature (fragile or not) to ensure the time spent on packing is minimal.
Maintain a Strong Delivery Fleet
Quite often, a lack of resources results in delayed deliveries. The products are all set to be shipped, but you don’t have enough workforce to get the product to the customer. Many e-commerce businesses struggle to maintain a good on-time delivery metric because of an unorganized delivery fleet or not enough delivery personnel to deliver orders on time. Working on building a fleet of trained delivery personnel can also help cut down delays in the delivery of orders.
Summing Up
Maintaining good on-time delivery metrics can help ensure customer satisfaction while also boosting the overall efficiency of your business. Considering the numerous benefits offered by having a steady, stable delivery, it is essential for e-commerce businesses and online retailers to find bottlenecks in their supply chain and work to resolve these at the earliest.
We hope this post gives you insight into OTD and what you can do to improve it!
