On-time Delivery vs Perfect Order Rate

On-time Delivery and Perfect Order Rate measure different aspects of order fulfillment efficiency and customer satisfaction. On-time Delivery focuses solely on whether orders arrive by the promised delivery date, tracking the percentage of shipments delivered within the agreed-upon timeframe regardless of other factors like order accuracy or product condition. Perfect Order Rate, meanwhile, is a more comprehensive metric that evaluates multiple dimensions of order fulfillment success, including on-time delivery plus order accuracy, completeness, damage-free condition, and correct documentation—essentially measuring the percentage of orders that are flawless from start to finish.

A manufacturing company should highlight On-time Delivery when specifically addressing logistical challenges or evaluating shipping carrier performance. For example, if seasonal weather patterns are causing shipping delays, tracking On-time Delivery helps isolate and address this specific issue. Conversely, the same company would emphasize Perfect Order Rate when assessing overall customer experience or evaluating the entire fulfillment process. If the company maintains a 95% On-time Delivery rate but only a 75% Perfect Order Rate, this indicates that while orders are arriving on schedule, problems like incorrect items, damaged products, or incomplete shipments are still creating significant customer satisfaction issues. While On-time Delivery helps optimize one critical aspect of fulfillment, Perfect Order Rate provides a holistic view of the entire customer experience from order placement through delivery.

On-time Delivery

Perfect Order Rate

What is it?

On-time delivery measures the percentage of orders delivered to customers on or before the promised delivery date. It helps evaluate the efficiency of the supply chain in meeting customer expectations. On-time delivery is crucial for maintaining high customer satisfaction levels. Timely delivery is often seen as a reflection of a company's reliability, and consistent punctuality can lead to increased customer trust and loyalty. Moreover, on-time delivery helps to avoid unnecessary costs related to late delivery compensation or loss of business, directly impacting the company's bottom line.

Perfect Order Rate measures the percentage of orders that are delivered without any errors, such as missing items, incorrect quantities, or damaged goods. It reflects the overall accuracy and quality of order fulfillment. The Perfect Order Rate (POR) is an essential supply chain metric that measures the effectiveness of an organization’s order fulfillment process. It is calculated by determining the percentage of orders that are executed flawlessly, without any errors or issues. Considered from a customer's perspective, a perfect order is one that arrives on time, contains the right items in the correct quantities, is delivered to the right place, and is accompanied by the correct invoicing.

Who is it for?

Formula

ƒ (Count of On-Time Deliveries / Total Number of Deliveries) x 100

ƒ (Count of Perfect Orders / Total Number of Orders) x 100

Example

Suppose a company has a total of 250 orders that were supposed to be delivered in the month of March. Out of these 250 orders, 230 were delivered on or before the promised delivery date. To calculate the On-Time Delivery percentage for March, we would apply the formula: On-Time Delivery % = (Count of On-Time Deliveries / Total Number of Deliveries) x 100 On-Time Delivery % = (230 / 250) x 100 = 92% This tells us that in March, 92% of the company's orders were delivered on time. This is an essential metric for the company to track and work on improving if necessary.

Assume in the month of April, a company had 300 total orders. Out of these, 270 orders were delivered perfectly, with no errors in items, quantities, location, timing or invoicing. Applying the formula to calculate the Perfect Order Rate: Perfect Order Rate % = (Count of Perfect Orders / Total Number of Orders) x 100 Perfect Order Rate % = (270 / 300) x 100 = 90% This means that in the month of April, 90% of the company's orders were perfect. This metric helps the company identify and rectify any issues in their order fulfillment process to increase customer satisfaction.

Published and updated dates

Date created: Sep 14, 2023

Latest update: Sep 14, 2023