Measure for Measure—Shipment Beats Delivery

What's the better benchmark when it comes to shipping the customer's goods? Is it when the order ships or when the order is delivered?  It seems not even distribution center managers can agree. According to a recent survey by the Warehousing and Education Research Council (WERC) more distribution center managers measure “on-time shipment,” rather than “on-time delivery.”

The DC Measures 2006 study conducted among more than 900 distribution center managers and was authored by Karl B. Manrodt, PhD, and associate professor at Georgia Southern University and Kate Vitasek, managing partner of Bellevue, WA-based Supply Chain Visions. Vitasek says one reason is managers prefer to track when an order ships is because it's easier to track. "It’s much tougher to obtain reliable data on precisely when the order was delivered." And, given the respondent base of DC managers, it could be that this measure more accurately reflects their daily responsibilities, she says.

Perhaps a bigger issue, Vitasek says, is the apparent lack of consensus regarding what constitutes on-time delivery. When asked whether their customers defined on-time delivery differently, nearly 69% responded “yes.”  How much variation could there possibly be in the definition of “on time?” Apparently, quite a lot: Many respondents (63.1%) indicated their customers simply defined an on-time delivery as a delivery on the requested or agreed-upon day. But others were more exacting—26.9% of the respondents said that “on time” meant delivery at an appointed time, or at least within a 30-minute window of that appointed time. Still others reported different definitions, including or “By 4:00 PM” This lack of agreed-upon standards and definitions goes a long way toward explaining why some suppliers have difficulty delivering “on time.”

For the full study, visit www.WERC.org