Measuring Supplier On Time Delivery
Monitoring of on time delivery (OTD) from supplier may trigger alternative sourcing. When a supplier is not on time continuously, we have no choice but to find a new supplier.

Measure only the suppliers with the most deliveries. Because they have many deliveries, they will be more prone to affect your production if they are not on time regardless of the monetary value of the supply. Also it is unfair for the suppliers with less deliveries if you measure them because even they only miss just a few deliveries, their result will seem to be bad.

To measure just divide "number of purchase order lines delivered on time" by "total number of purchase order lines delivered". One PO can contain several lines representing several products respectively. For example one PO buys product A 1 unit, product B 10 units and product C 100 units. All units in Product A and C are delivered on time but 1 out of 10 product B is late. Then OTD = 2/3. For product B although just one unit is not on time, all units are considered not on time.
Posted: 2007-01-22 by Ong Seng Aun.
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