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On-Time Delivery: Understanding, Calculating and Improving Your Last Mile KPI

A Last Mile Delivery Van Drives Up the Road

While on-time delivery is a common measurement within our industry, it’s notoriously difficult to measure. Your on-time delivery KPIs (key performance indicators) are important to pay attention to, because they can reveal inefficiencies or bottlenecks in your fulfillment or delivery processes. 

Here’s a guide to understanding, calculating and improving your on-time delivery KPI. 

How are on-time last mile delivery KPIs calculated?

The on-time last mile delivery rate is a great way to measure how well your company performs when it comes to delivery accuracy. You calculate this by dividing total orders delivered by the number of arrivals after the promised date, giving you an idea as to the percentages of last mile deliveries fulfilled vs. last mile deliveries missed.

How can you improve your on-time last mile delivery?

First you need to pinpoint the areas in your supply chain that are problematic. Where and when are the delivery delays happening? Once you know the problem, create a standardized process to track the late deliveries, and the reasons for them. This will make it easier for your team to track disruptions, and give you a snapshot of your supply chain issues. Then, you can recognize any repeat issues and patterns. By analyzing the data at hand, solutions will present themselves.

What is on-time last mile delivery performance?

A company’s on-time delivery performance is often tracked using the ratio between customer order lines shipped within their promised date/time vs. total ship dates. This on-time delivery metric can be calculated for several periods and will vary, depending on how long you’ve been in business, as well as any geographical areas that may affect shipping rates. 

What is a good on-time last mile delivery rate?

The Amazon Effect has changed public perception of what a “good” on-time delivery rate is. Now, standards are higher than before, and expectations for a good on-time delivery rate are close to 95%. Industry averages, however, can vary, depending on external factors like geographic areas or resourcing issues. So, a good on-time delivery rate can fluctuate. Be sure to consider all relevant factors when measuring yours. 

What can you do for your on-time delivery service?

What can you do right now to improve your on-time delivery? Take the first step toward understanding how it’s calculated and recognizing which factors have the biggest impact on your results. Once you know that, you can start work on improving them. 

Then, make sure you’re tracking your on-time delivery progress by monitoring your performance. A good rate is anything above 95%, but always aim for 100%. 

Ready to get started? Book a Last Mile Delivery demo with OneRail today and we’ll help you take your business to the next level.

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