On-Time Metrics Come in Several Moving Parts Versions

Productivity Improvements

Consider shipment productivity. Think of one way that you could improve shipment productivity and explain.

On-time shipments are an important indicator of how well various systems are functioning in relation to one another. Paying attention to on time shipment rates and patterns can also reveal any bottlenecks that are either novel or chronic. The various dimensions related to the on-time metric include the trends for shipments that are made on time, late, or early.

While the overarching goal is ensure that shipments are made on time and are not late, customer preferences and allowances can determine how much margin is permitted and desirable. For instance, a customer might indicate that early shipments are fine with them (i.e., the customer has plenty of room to store shipments in the warehouses or has generous display spaces that can absorb early shipments).

In addition to these fundamental measures of shipment logistics and timeliness, an additional time-based metric that applies to shipping is lines that are late to promise. The lines late to promise metric shows the total number of lines that shipped late or are shipped after a particular promise date. The calculation for lines late to promise is the calculation of the number of lines that are shipped late by a firm divided by the lines that were shipped, which is multiplied by 100 to arrive at a percentage.

The lines late to promise is a particularly salient metric as it is one of only a handful that garner the full attention of the customer. That said, an array of path to fulfillment stream metrics exist and are regularly used, including the following: Lead time, or the order-to-receiving time, supplier quality (as measured by the percentage of defects or the lines rejected divided by the lines received), receiving accuracy (as measured by the percentage of orders received accurately -- a figure that represents the count at receiving or the cycle count), supplier on-time (which is the purchase order receipt or PO date-to-first receipts), inventory accuracy (as measured by the actual vs. total, according to cycle count), the inventory on-hand or number of days that inventory is carried, warehouse utilization -- also known as the pack factor -- a measure of the number of bin space used divided by the total available, and finally, on-time delivery, which is basically the period from which the first customer shipment takes place to the customer delivery date expected by the company.

2. Think of one other Productivity Measure you might use at the EBBD and explain how you would calculate it. And then how would use it to improve productivity?