What is Delivery Time Variance?
The deviation in actual delivery time from the expected or promised delivery time. The shipping time refers to the interval elapsed between the instance when the shipment leaves the fulfillment center and when it reaches the intended destination.
How to calculate Delivery Time Variance?
(Sum of Delivery Time Deviations for All Orders) / Total Orders where Delivery Time Deviation can be calculated as the difference between the expected delivery time and the actual delivery time.
What is the business impact of Delivery Time Variance?
- Lower variance indicates consistent shipping performance and improved customer satisfaction.
- Higher variance can lead to lost customer confidence and a drop in sales.
Industry benchmark for Delivery Time Variance
- Industry Benchmark: As close to zero as possible
How to improve Delivery Time Variance?
- Better carrier selection through constant carrier performance monitoring.
- Implement outbound shipment tracking for visibility into any deviance.
- Optimize the route for the shipping process to minimize Delivery Time Variance.