Measuring on-time delivery performance is crucial for shippers, and doing it right is essential. As Peter Drucker famously said, “If you can’t measure it, you can’t improve it.” Unfortunately, many shippers either lack the necessary data to assess their delivery performance or are unsure how to proceed. What’s more, even when they measure on-time performance, they doubt the results due to poor data quality. Worse still, even if they do measure on-time delivery accurately, many shippers struggle with conducting root cause analysis to take corrective actions.

In this article, we’ll look at the common pitfalls in measuring on-time delivery (OTD) performance. While it may seem straightforward, there are numerous traps that can lead to inaccurate measurements and misleading results. Join me as I detail the five best data analytics practices to accurately measure on-time delivery. More importantly, I’ll show you how to use this data to identify the root causes of delivery failures and implement effective corrective actions.

Common Mistakes When Measuring eCommerce On Time Delivery.

First, the best way to measure on-time delivery is to use key performance indicators (KPI). Indeed, on-time delivery KPIs are crucial metrics for measuring and evaluating the efficiency and effectiveness of a company’s ecommerce delivery process. For a detailed explanation of KPIs, see my article, The Best On-Time Delivery KPIs To Make Your Customers Delighted.

Now, measuring on-time delivery performance is not easy. This is because of many factors to include determining what to measure and getting access to the data you need. As a result, it is easy to make mistakes. Below is a list of common mistakes when measuring on-time delivery.

Common Mistakes When Measuring On-Time Delivery

Measuring On-Time Delivery: 9 Mistakes You Want To Avoid For More Reliable Delivery Results

• a. Relying On Shipment Status That Is Inaccurate Or Lacks Detail Scans.
• b. Relying On Incomplete Tracking Data.
• c. Measuring On-Time Delivery Against The Wrong Promised Date.
• d. Incorrectly Measuring On-Time Delivery.
• e. Neglecting To Consider The Time To Process, Pick, & Pack An Order.
• f. Not Balancing Costs And Setting Too High Of An On-Time Delivery Standard.
• g. Skew Measurements To Make The Operations Look Good.
• h. Too Focused On Collecting Carrier Service Refunds Versus Improving Performance.
• i. Blindly Measuring Performance Because the Boss Told You To Do It.

For a detail discussion on these mistakes, see my article, Measuring On-Time Delivery: 9 Mistakes You Want To Avoid For More Reliable Delivery Results.

4 Major Benefits Of Measuring Ecommerce On-Time Delivery Performance.

“If you can’t measure it, you can’t improve it”

Peter Drucker

Measuring ecommerce on-time delivery performance is crucial for businesses. In fact, improving your ecommerce delivery operation is the number one reason to measure OTD performance. This Key Performance Indicator (KPI) enables you to identify the root cause of delivery exceptions and to take corrective action. As a result of continuous operations improvement, the following benefits will occur.

Benefits Of Measuring And Optimizing Ecommerce On Time Delivery. 

1. Delight The Customer. When customers receive their orders on time, they are more likely to be pleased with their shopping experience and become repeat customers.
2. Brand Reputation. Late deliveries can damage a business’s reputation and lead to negative reviews and word-of-mouth publicity.
3. Cost Savings. By improving on-time delivery performance, businesses avoid additional costs such as express shipping fees or refunds for dissatisfied customers.
4. Competitive Advantage. In today’s competitive ecommerce landscape, businesses that offer fast, reliable delivery are more likely to attract and retain customers.

5 Data Analytics Practices for Best Measuring Ecommerce On Time Delivery.

“When measuring OTD, the crucial data elements are dates: shipped, delivered, and promised. “

Again, businesses can make a lot of mistakes when measuring on-time performance. The primary way to avoid mistakes in measuring OTD is through effective data analytics. First, you need to collect the right data that is both complete and accurate. Next, you need to measure the right data to both measure OTD performance and identify the root cause of a delivery failure. This is called diagnostic analytics where you find out the “why” behind the delivery failure. For more discussion, see my article, Diagnostic Analytics For Agile Decision-Making: The Best Way For Businesses To Quickly Research Why Things Happened.

When measuring OTD, the crucial data elements are dates: shipped, delivered, and promised. Below are some data analytics tips for measuring on time delivery performance and diagnosing the root cause of a delivery exception.

1. Date Shipped: Accurately Measuring It for On-Time Delivery.

90% of the time it is easy to determine the date shipped. The carrier provides a “hard” ship date – i.e. the date and time they picked up and took possession of the shipment. The other 10% of the time the date and time shipped are ambiguous.

For the other 10%, you have limited ship date information (when the carrier took possession) from either the carrier or your shipping operations. As a result, some shippers will use the date on the Bill Of Lading (BOL) or the electronic manifest date (the time the shipping label was created) as the “official” ship date. As best, these “soft” ship dates are better than nothing. Worse, these “soft” ship dates can skew your OTD measurements. What is critical is to work with your carrier and shipping operation to obtain a “hard” ship date. Otherwise, you need to beware that your on time performance rate is suspect. 

“… work with your carrier and shipping operation to obtain a “hard” ship date.”

2. Date Delivered: Need To Capture In Order to Measure On-Time Delivery.

This is usually fairly easy as most carriers provide a “hard” delivery date and time.The reason for this is because most delivery drivers scan the shipment barcode at the point of delivery or they get a delivery signature, or a picture of the package as the proof of delivery (POD). Again, if you are not getting good delivery data, you need to invest time and work with the delivery carrier to get that information.

3. Promised Delivery Date: This is Provided by the Shipper, Not the Carrier.

“… the carrier’s promised date is not necessarily your company’s promised date.”

Determining the promised data can be tricky for many operations. If you have a mature ecommerce operation, normally the order fulfillment system generates the promised date and that is provided to the end-customer. If you have a well run operation, this promised date in your order fulfillment system will match what the delivery carrier’s estimated delivery date is. Of note, the promised date can change if there is some type of shipment or delivery exception.

Remember, the carrier’s promised date is not necessarily your company’s promised date. Hence, it is the ecommerce operation that is responsible for determining the promised date. Indeed, it is the shipper who can best determine the promised date balancing it against customer desires, cost efficiency, the competition, and what is achievable.

4. Delivery Exceptions: Key to Capture These Events for Analysis to Identify Root Cause and Corrective Action.

Ecommerce Delivery Exception Mistakes To Avoid And How To Handle

Sometimes delivery or shipment exceptions are hard to measure. If either the shipper or the carrier has immature IT systems, these exceptions may either not get recorded, nor communicated to key stakeholders.

Of note, usually only about 50% of these delivery exceptions can be attributed to the carrier. Other reasons for delivery problems can be because the business was closed. Or it could be because of something out of the carrier’s control such as bad weather. Or worse, it could be you, the shipper, that caused the issue such as a bad shipping label or the address is incorrect. For a detailed discussion on delivery exceptions, see my article, eCommerce Delivery Exception Mistakes To Avoid And How To Handle.

5. Order Fulfillment Click-To-Ship Analysis: Identify All Delivery Exceptions, Not Just Caused By the Carrier.

Often, many shippers are quick to attribute delivery exceptions to the carrier. However, this viewpoint isn’t always accurate. In fact, for many ecommerce operations, over half of the delivery exceptions are unrelated to the carrier. Therefore, it’s crucial to obtain shipment data from your order fulfillment system when evaluating on-time delivery performance.

Specifically, this order fulfillment data should encompass various aspects of the order. This includes the initial delivery date promised to the customer and the duration required to fulfill the order. Also, you need data on any returned shipments, and any other order defects like damages or incorrect picks. By focusing on these details, you gain a more precise understanding of delivery performance and can better work toward improving it.

6. More Resources for Measuring On-Time Performance.

For more information and viewpoints on measuring on time delivery performance, see these articles:

• Samir Saci’s article Logistic Performance Management Using Data Analytics
• Descartes’ Analytics For Improving Carrier and Supplier Performance
• VisualSouth’s How to Measure the On-Time Delivery KPI
• Stacey Barr’s How To Meaningfully Measure On Time Delivery Of Anything
• SC Tech Insights’ article, The Best On-Time Delivery KPIs To Make Your Customers Delighted.

The Best On-Time Delivery KPIs To Make Your Customers Delighted

Use Your On Time Delivery Analytics To Start Measuring And Minimize Delivery Exceptions.

So now you know how to accurately measure service performance. The next step is for your to focus on minimizing delivery exceptions. You do that by digging into your on time delivery data to identify root causes of delivery failure. From there you can take corrective action to minimize delivery exceptions in the future. For more details on how to handle delivery exceptions, see my article, eCommerce Delivery Exception Mistakes To Avoid And How To Handle.

For more from SC Tech Insights, see the latest articles on shipping.