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In today’s fast-moving supply chain environment, decision-makers rely on key performance indicators to guide improvements, streamline operations, and strengthen customer relationships. Understanding these metrics and how they impact each stage of the shipping lifecycle is essential for building an efficient supply chain.
Welcome to Shipping Metrics That Matter, a blog series that focuses on critical metrics that offer clear visibility into shipping performance. From the moment an order is placed to final delivery, we’ll break down the metrics that reveal where your operations shine. Each blog will explore one metric in detail, highlighting its role in supply chain success and where optimization opportunities lie.
The series will cover:
- On-Time Delivery (OTD)
- Order Cycle Time
- Perfect Order Rate
- Shipping Cost per Order
- Freight Audit Discrepancy Rate
- Address Error Rate
Timeliness Is Everything
In the race for customer satisfaction, there’s one number that consistently makes or breaks a company’s reputation: On-Time Delivery (OTD). Whether you're shipping components for a manufacturing line or fulfilling a retail customer’s weekend order, a late delivery sends a clear message: We’re not as reliable as we promised.
This pressure is only growing. With eCommerce norms setting new standards and B2B buyers expecting the same speed and transparency, delays are no longer tolerated—they’re called out on dashboards, reviewed in QBRs, and scrutinized in contracts.
What Is On-Time Delivery (OTD)?
OTD = (Number of orders delivered on or before the promised date) ÷ (Total number of orders shipped)
Simple? Not quite.
The definition of “on time” varies: Is it based on the promised date or the requested date? Do you count the first delivery attempt or the final one? Without consistent definitions across business units, reporting can get muddy fast.
To make OTD meaningful, consistency is key.
Measuring OTD the same way across your shipping operation gives you a trustworthy benchmark for performance. Best-in-class On-Time Delivery (OTD) performance typically falls between 95% and 98%, particularly in sectors like e-commerce and retail where delivery speed and reliability are critical.
Why OTD Should Be on Every Dashboard
- Customer Experience
A missed delivery feels like a broken promise—especially in B2C environments where trust is fragile. For B2B, a late pallet could stall production or disrupt downstream timelines.
- SLA & Compliance
Enterprise contracts often include delivery windows. Miss the SLA? Expect penalties or damaged partnerships.
- Operational Efficiency
Frequent late deliveries create a ripple effect—more customer service calls, more returns, more manual investigations.
5 Ways to Improve On-Time Delivery
- Centralize visibility across all shipments and carriers
- Automate exception alerts to reroute or notify stakeholders faster
- Monitor carrier performance by region and service level
- Strengthen address validation to reduce delivery failures
- Set realistic promised dates based on actual lane performance
Where ShipERP Fits
Enhancing On-Time Delivery requires precise visibility and agile automation across your shipping network. ShipERP supports OTD optimization by:
- Providing real-time tracking and shipment visibility across multiple carriers and geographies
- Enabling dynamic carrier selection and rate shopping to optimize delivery performance
- Integrating seamlessly with ERP systems to maintain data accuracy and reduce manual intervention
- Consolidating shipment data into centralized dashboards for easier performance monitoring and decision-making
It’s not about speeding up your delivery vans—it’s about making your shipping process smarter and more responsive to change.
Final Thought: Timeliness Builds Trust
On-Time Delivery (OTD) more than a performance metric—it’s one of the clearest indicators of supply chain reliability. Consistently meeting delivery commitments strengthens customer trust, improves operational efficiency, and protects business reputation in increasingly competitive markets.
Improving OTD requires more than tracking shipments. It demands full visibility across the shipping lifecycle, quick response to disruptions, and data-driven decision-making at every stage. With better insight into carrier performance and shipment movement, supply chain teams can minimize delays and set more accurate delivery expectations.
Establishing a clear, consistent approach to measuring OTD allows organizations to identify gaps, optimize processes, and build resilience. As customer expectations for reliability and transparency continue to rise, companies with strong delivery performance will have a distinct advantage.
Coming up next in the Shipping Metrics That Matter series:
Order Cycle Time – We’ll explore how to optimize the full order-to-delivery timeline and why shortening it creates a competitive edge.