What Is On-Time Delivery?
On-Time Delivery (OTD) measures the percentage of deliveries that arrive by the customer-requested date. It is the single most visible measure of your reliability from the customer’s perspective.
The Formula
OTD = (On-Time Deliveries ÷ Total Deliveries) × 100%“On time” is typically defined as within an agreed window (e.g. same day, or +/- 1 day, as contracted).
Data Requirements
| Source | Required | What You Need |
|---|---|---|
| ERP | Yes | Order promised dates, actual ship/delivery dates |
On-Time Delivery is a Phase 3 metric — it requires ERP order management data.
Why It Matters
- Customer satisfaction — meeting commitments builds trust
- Competitive positioning — reliable delivery is a genuine market differentiator
- Revenue protection — late deliveries risk lost customers and future orders
- Penalty avoidance — many contracts include penalties for late delivery
Best Practices
- Define the “on-time” window clearly (same day, +/- 1 day, etc.) and apply it consistently
- Track early and late deliveries separately — both indicate planning issues
- Analyse root causes of late deliveries (capacity, material, quality, scheduling)
- Set realistic lead times based on actual capability rather than aspirational targets
Related Metrics
- Order Fulfilment Rate — OTD is a component of perfect order fulfilment
- Schedule Adherence — internal schedule performance drives OTD
- Lead Time — shorter lead times provide more buffer for on-time delivery