Marion Liedtke
20. April 2023

Delivery performance is a critical factor for your company’s success. The punctual provision of products and services is an important part of high delivery performance. These factors are essential to ensure customer satisfaction and ensure repeat business. In addition, smooth processes ensure cost-effective work from production to logistics. Find out which factors are important for delivery performance, what role delivery reliability plays in this and how you can improve your delivery performance thanks to AI.

Delivery performance describes how quickly, effectively and reliably a supplier delivers ordered products or orders. A high delivery performance therefore aims to provide orders on time and in the right quantity and quality. This is particularly important in just-in-time production. If the goods are delivered too early, there may not be any storage capacity available. If the delivery is late, the production will be delayed. In addition, the supply chain should function as cost-effectively as possible.

Key influencing factors on the delivery performance are:

  • Supplier Quality: The quality of goods or services provided by suppliers can affect delivery performance. If the quality of the products is poor, it may cause delays or errors in delivery.
  • Demand Forecasting: Failure to accurately forecast demand can create bottlenecks in the supply chain and impact delivery performance.
  • Transport and logistics: Delays in transport and logistics processing can lead to delays in delivery and affect delivery performance.
  • Stock Levels: If stock levels are insufficient to meet demand, this may cause delays in delivery.
  • Supplier management: Poor communication or cooperation with suppliers can lead to delays and errors in delivery.

How can delivery performance
be measured?

Positive customer feedback, but also complaints and reclamations are important indicators of delivery performance. In addition, delivery reliability is an important indicator for measuring delivery performance. It indicates how reliably deliveries are made. The four most important characteristics for determining delivery reliability and delivery performance are:

  1. Delivery time: The time between purchase and delivery
  2. Delivery Reliability: The percentage of orders that were delivered on time
  3. Delivery quantity: The quantity actually delivered compared to the quantity ordered
  4. Quality: The integrity and conformity of the delivered goods or services with the specifications of the order
INFO: How is delivery reliability calculated?

The calculation of delivery reliability depends on the type of industry and the methodology used. It is often expressed as a percentage. The higher the percentage, the better. A low percentage indicates problems in the supply chain. The following formula gives the delivery reliability.

Delivery reliability = number of orders delivered on time / total number of orders x 100

Particular challenges for
delivery performance

Maintaining a high delivery performance is always a demanding task. Special circumstances can increase the difficulty of this task:

  1. Complexity of the supply chain: The more complex the supply chain, the more difficult it can be to ensure delivery reliability and delivery performance ensure.
  2. Unforeseen Events: Natural disasters, political unrest or other unforeseen events may result in delivery delays or interruptions.
  3. Supply shortages: If there are difficulties in obtaining materials or components, this can cause shortages in the lead the supply chain and impair delivery performance and delivery reliability.

What are the advantages of a
high delivery performance?

A high delivery performance brings your company numerous advantages. The most obvious benefits are the trust of your customers and higher customer satisfaction. This in turn leads to follow-up orders through recommendations and long-term customer loyalty.

In addition, you can improve your company’s cash flow with good delivery performance. Effective processes save you money and can even earn more. For example, you can save storage capacity and avoid bottlenecks with just-in-time orders in production. In the service sector, on the other hand, a smooth delivery process enables the processing of a higher number of orders, since you have to allow for less time buffer.

How can delivery performance
be improved?

A comprehensive analysis of the existing supply chain is important for successfully improving delivery performance and delivery reliability. After that, you should set clear and realistic goals for yourself and regularly monitor your progress. The management commitment is essential to ensure the necessary resources for implementation. In concrete terms, the delivery performance can be improved with the following parameters:

Introduction Of Technology

Automated ordering and delivery processes can help shorten delivery times and reduce errors.

Risk Management

A comprehensive risk analysis can help identify potential supply chain disruptions and take appropriate action to minimize the risk of delays and disruptions.

Optimization Of Logistic Processes

Effective logistics planning can help reduce transportation and storage costs while shortening delivery time.

By implementing quality assurance measures and control processes, errors in order processing, packaging and shipping can be avoided.

Improving Demand Forecasting

A more accurate forecast of demand can help to better plan orders and inventory to avoid bottlenecks in the supply chain.

Better collaboration with suppliers can help reduce lead time and reduce bottlenecks in the supply chain.

Monitoring performance using metrics such as on-time delivery can help identify bottlenecks in the supply chain and take targeted action to resolve them.

How can AI help improve delivery performance?

Through an AI-based analysis of your delivery performance, you can achieve a high degree of automation. This saves resources in the purchasing and delivery process. In addition, the AI can identify deviations in all areas of the supply chain at an early stage and preventively provide information about possible sources of error. In this way, purchasing can react before bottlenecks occur in production.

The metrics that the AI uses to analyze your delivery performance depend on your industry and the individual challenges of your supply chain. The first step is always identification of suitable parametersand possible vulnerabilities.

An improved delivery performance brings clear competitive advantages

Customer satisfaction: A good delivery performance includes a punctual, reliable and qualitatively flawless delivery of products and services and thus leads to a high level of customer satisfaction.

Efficiency: A smooth supply chain increases the efficiency of your company’s processes.

Cost reduction: A high delivery performance and delivery reliability help to reduce costs by avoiding unnecessary inventories or overorders.

Higher yields: Smooth processes ensure capacity for more orders.

Your competitive advantage: You create trust with reliable delivery performance. Efficient processing allows high profitability and particularly market-friendly prices.