On-time delivery (OTD) is one of the most critical aspects of eCommerce. While buyers expect their orders to get delivered on time, sellers tend to leave no stone unturned to meet delivery deadlines.
With every passing day, timely delivery of shipments is increasingly becoming a key differentiator as to whether a direct-to-customer (D2C) brand succeeds or fails.
What Is On-Time Delivery?
OTD means delivering goods or services to customers within the agreed-upon timeframe. It is vital to customer satisfaction and helps you build a positive reputation.
Also, OTD can be referred to as the indicator used to estimate supply chain efficiency. This metric is essential for measuring a courier service’s performance and shows whether or not a company is meeting its goals regarding promised delivery timelines.
Why Is On-Time Delivery Important?
OTD is very important for eCommerce businesses. Monitoring OTD is critical as it lets you pinpoint areas to enhance your delivery and fulfillment procedures, ensuring users receive orders on time.
Improving the OTD rate can lead to various benefits, including but not limited to the following:
Enhanced Operational Efficiency
Timely deliveries help you keep moving smoothly and reduce the burden on your supply chain. You can analyse your delivery and fulfillment strategies and identify areas for advancement to scale up your operational efficiency and accuracy.
Enriched Customer Satisfaction
Customer satisfaction is paramount for all businesses and industries, let alone eCommerce businesses. Companies try everything in the book to deliver a seamless and pleasant customer experience.
Delivering orders on time helps you boost customer satisfaction and brand loyalty. This encourages customers to place repeat orders in the future.
Reduced Cases of Perishable Items Going to Waste
Certain items, such as eatables, medicines, temperature-sensitive products, milk by-products, etc., have expiration dates attached. Therefore, people responsible for transporting such goods must deliver them within strict deadlines.
If customers or recipients of such items or samples do not receive them within the stipulated time frames, the whole purpose of purchasing or opting for them is often defeated. Time-bound delivery of perishable products, pharmaceuticals and medical samples is significant as it reduces losses and sometimes can be life-saving.
Reduced Cases of Return to Origin
Return to origin (RTO) is one of the biggest pain points for eCommerce businesses as it directly impacts revenue and profit.
RTOs can inflict several disadvantages, such as logistics costs, blocked inventory, repackaging, increased probability of damage, etc.
Positive feedback is crucial for converting potential customers into buyers. Better reviews work wonders for businesses running online marketplaces and D2C brands. Customers are more likely to write positive feedback for the companies delivering timely shipments.
Higher Profit Margins
It’s all about the numbers at the end of the day. More satisfied customers, an increased number of orders and an improved bottom line are what companies look to accomplish.
You can achieve most or all the above numbers if you deliver products on time. OTD can decrease return orders and shape brand loyalty resulting in increased order volumes. This way, you can realize higher revenue margins.
How to Track and Measure OTD
OTD is quick and easy to calculate. Before we proceed with the procedure and formula to track and measure it, let’s understand what it means for your business.
OTD is directly proportional to your company’s delivery efficiency, meaning the higher your OTD rate, the more efficient your fulfillment operation is.
Here’s How We Calculate OTD:
- We need to define a timeframe for which we aim to calculate OTD.
- Check for the total number of shipments dispatched during the chosen timeline and identify the number of orders delivered on or before the assigned delivery time.
- As we have both the components required to calculate OTD, divide the number of orders delivered on time by the total number of shipped orders.
- To get the percentage, we must multiply the answer obtained above (in the third step) by 100.
OTD = (Orders delivered on time / Total orders shipped) x 100
Now that the OTD rate has been derived, you should objectively analyse the same. Results of the above calculations may not always show that you are going along very well vis-à-vis your shipment deadlines.
You may need to ramp up your operational efficiency to enhance the OTD rate. This way, you may optimise the timely delivery and take customer satisfaction to the next level.
Steps to Enhance OTD
Attaining OTD requires robust strategy and management of resources, including timeframes, goods, and people involved at various stages of the delivery cycle.
It includes assigning realistic timelines, monitoring progress, and taking remedial measures when required to deal with uncertainties and delays.
While there may be numerous ways to improve OTD, here are some steps that can be handy in enhancing a brand’s timely delivery metric:
Set Realistic Delivery Deadlines
Setting reasonable delivery deadlines is the first step and one of the crucial aspects of getting shipments delivered on time.
It requires thoroughly assessing your supply chain strategies and existing OTD rates to determine a realistic delivery timeline. After the analysis, you may revise existing timelines to combat delays.
A shipment goes through many steps and touches the hands of multiple people en route before it gets delivered to the customer.
Therefore, strong coordination between various stages and a well-laid-out system is needed for the smooth and timely delivery of shipments.
Incentive programmes can encourage them to coordinate better and help employees meet their goals. According to a report, as much as 85% of employees feel motivated to boost their performance when incentive plans are in place.
Making the best possible use of technology can be significantly helpful. You may deploy inventory management tools to keep track of stock availability and find items’ variations.
How Pickrr Can Help You Improve On-Time Deliveries
Many businesses may not have multiple warehouses across cities to be consistent with their delivery deadlines. However, they can rely on Pickrr’s most comprehensive network of fulfillment centres across India to enhance their OTD rates.
Reliable Courier Partners
With Pickrr, you can choose your preferred courier company from a pool of 30+ delivery partners.
Alternatively, you can sit back and relax, as Pickrr recommends the most suitable delivery partner for your shipments and helps you deliver orders across India.
OTD is a critical metric in the eCommerce industry. Timely deliveries can help you reduce RTO cases and improve profit margins. Also, keeping track of on-time deliveries and maintaining a high OTD rate can help you scale up your customer satisfaction.
Frequently Asked Questions
Q1. What are the factors affecting on-time delivery?
A1. On-time deliveries can be affected for various reasons (avoidable and unavoidable both).
Here are some of the prominent causes affecting OTD:
- Assigning unrealistic delivery timelines
- Inventory mismanagement
- Unavailability of local warehouse
- The customer being unreachable (in case of incorrect address)
Q2. What is the best way to measure on-time delivery?
A2. You can measure on-time delivery by dividing the number of orders delivered on time by the total number of shipped orders and then multiplying the result by 100.
Q3. How do we ensure product delivery on time?
A3. Here are the strategies you may implement to ensure on-time delivery of orders:
- Set realistic delivery deadlines
- Track your inventory
- Prompt customers to furnish correct delivery addresses and contact details
- Consider opting for a local warehouse or fulfillment centre
- Ensure real-time tracking of shipments