Delivery Performance Tips
So how do you know if your supply chain is running properly? First, look at your on-time delivery percentage. If it's above 95%, then you are performing smoothly but if it's below that level, there are several things that may need to be adjusted:
When a customer places an order with a particular supplier, the order is placed, the supplier contacts the company and then the supplier fulfilling it. The supplier then communicates with the company who takes care of fulfilling the order, through channels such as warehouses and distributors, and communicates its product information to the actual company manufacturing the supply. If the supply chain has poor on-time delivery performance, the company may have to wait a while for the item to be delivered or it may be sold to another dealer who may ship it to a wrong address.
Other factors affecting on-time delivery performance include shipping costs. If a chemical company is shipping from a distant location, like the plant or warehouse of a chemical company, the delivery time will always be longer than normal. Also, when using a common carrier, the costs for fuel surcharges and taxes can eat into the profit margin. If the logistics operations are not robust enough to cope with these kinds of costs, the company may lose money. Similarly, when a large amount of inventory is stored in a warehouse, there is the risk that it will get damaged or be stolen.
Weak shipping documentation can also have a negative effect on the on-time delivery. For instance, when ordering goods in bulk, it is very important to have accurate and complete shipping documentation to make sure that the products reach the correct locations. A shipper's records must be clear and precise so that the delivery can go smoothly and in accordance with the company's rules. There are many instances when suppliers have had to reverse or adjust their shipping directions because of poor shipping documentation. This can seriously impact on the company's on-time performance because the delivery date was not accurate and can greatly affect the cost of production and sales.
It is therefore essential for a company to take note of the quality of its shipping documentation and look into what corrective measures can be taken to improve its operational performance. Improving documentation is not an easy task and is best done by those who have experience in this area. There are many companies that offer consulting services on this matter. These companies have significant expertise and can quickly identify the areas that need improvement. In addition, they will be able to advise a company on how to improve its operational performance.
The most effective way of managing operations and improving delivery date are to involve the shipping department as much as possible. If there are delays in the delivery date then the shipping department must know this. If it does not receive all the information that it requires from the supplier then it cannot provide accurate information to the management. This is why the logistics manager should visit the supply chain site to see for himself exactly where the problem lies and what he needs to do to fix it.
By involving the shipping department in the process of improving the on-time delivery then the overall productivity and profitability of the company will increase. An improvement in the on-time delivery percentage can lead to a rise in the number of deliveries per day, which will translate into more revenue. This is because the volume of traffic will increase. Also, if there is less traffic than the average delivery time will decrease. There are many business processes that can be improved by integrating the processes of supply planning, sops, and shipping department.
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