What (If any) tolerance levels does your organization use for Measuring On-Time Delivery?

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Sr. Director of Supply Chain in Healthcare and Biotecha year ago

This depends on what you want as an organization to drive and how you want to hold your supply partners accountable. Typically, tolerances can vary as x days early and y days late calendar days (Ex. -5 days before and two days late).

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Supply Chain Manager in Healthcare and Biotech7 months ago

Hi Mohammad, we are in the process of reviewing on time tolerances and I struggle to find a rationale to include them
From my perspective, late deliveries tolerances should be 0 as once you share with your customer the delivery date, their expectations is that as clients we meet them but this is not everyone's view in the organization
How did you come with this ranges?
Many thanks!

Sr. Director of Supply Chain in Healthcare and Biotech2 months ago

Hi Toni,
The end Customer should be on time or early. Late is never good. However, this context was for incoming materials to build your widget.

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Founder & Supply Chain Expert, Oakmont Supply Solutions in Consumer Goodsa year ago

If we're talking about On-Time Delivery to customers, I would say this varies significantly by business based on customer requirements and is usually determined by their compliance fine structure. For example, if you are selling into big box retail, a common expectation is a 98% OTIF. Wholesale distribution might have a slightly lower target (often in my experience between 90-95%).

If we're talking about On-Time Delivery from vendors, I agree with .

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Sr. Director of Supply Chain in Healthcare and Biotecha year ago

I fully agree, Lindsey Walker; the OTD/OTIF customer viewpoint differs slightly. We want to be above 95%, ideally.

Those new to this KPI start with your baseline, then measure from there, making it a step-up function over time. Continually improve with Pareto's and the root cause, and corrective action on addressing the miss. The logic can be applied to both supplier-driven and fulfilling orders.

Director of Information Securitya year ago

Assuming we are talking about On-Time delivery to customers. We are a chemical manufacturer serving a wide variety of markets (B2B customers) with different mode of transports (Road, Rail, Sea & Air) we would like to ensure that our OTD/OTIF is representative

Example of our suggested On-time tolerances by mode:
Road: -+1 day
Air ≤ + 1 day
Rail -+3 days
Ocean -7/+3 days

Does this look representative and could be benchmarked?