What is On-Time Shipment Rate?
Percentage of orders shipped on or before the promised date.
How to calculate On-Time Shipment Rate?
(Total On-Time Shipments / Total Orders) * 100 where on-time shipments are all shipments where the order cycle time < promised delivery SLA
What is the business impact of On-Time Shipment Rate?
Higher on-time shipment rates lead to increased customer satisfaction and repeat business.
Industry benchmark On-Time Shipment Rate
The general industry benchmark for On-Time Shipment Rate is 95-98%
How to improve On-Time Shipment Rate?
- Implement automated order prioritization corresponding to the SLAs.
- Automate and enhance shipping processes.
- Improve carrier partnerships.
- Implement better demand forecasting to reduce stock-out situations and improve order fill rate.