On time delivery ratio- OTD

On time deliveryis a measure of process and supply chain efficiency which measures the amount of finish goods or services delivered to customers on time and in full. It helps determine how efficiently we are meeting our customer's or agreed deadlines. If the figure is too low or below the benchmark it could be used as a signal that somewhere along the supply chain there are bottlenecks, inefficient or time consuming processes which are not adding value and warrant further investigation or a slower delivery method is being employed.

On time delivery is a very simple measure but sometimes overlooked in many organizations, and it is simply calculated as the amount of units or shipments delivered on time versus total orders shipped:

(units or orders delivered on time) / (total units or orders shipped)

Remember that servicing the customer's needs, including adhering to lead times, should be an important priority to everyone in the business. From the customer's side lead times are important to ensure an orderly and timely operation of their productive system, specially if they operate on a Just in time basis (JIT).