What is On-Time Delivery (OTD)?
A metric that measures the percentage of orders, projects, or services delivered by the promised date.
Detailed Explanation
On-Time Delivery is a critical performance metric that tracks how reliably an organisation meets its committed delivery dates. It is calculated as the number of deliveries made on or before the promised date divided by the total number of deliveries, expressed as a percentage. OTD can be measured at various levels — individual orders, customer accounts, product lines, or the entire business. Consistently high OTD requires accurate capacity planning, reliable supply chains, effective scheduling, and robust process execution. It is one of the most important metrics for customer satisfaction and retention.
Why It Matters
Late delivery erodes customer trust faster than almost any other failure. In B2B relationships, your late delivery can cause your customer to miss their own commitments, amplifying the damage. Tracking and improving OTD is one of the highest-impact investments a business can make in customer retention.
Example
A commercial printer tracks their OTD and discovers it is running at 72%. Analysis reveals that the main cause is delays in client artwork approval. They implement an automated approval reminder workflow with clear deadlines and a clause that adjusts delivery dates when approvals are late. Their OTD improves to 94% within three months.
Related Terms
A formal commitment between a service provider and a client that defines the expected standard of service, including response times, availability, and quality metrics.
The total time from when a customer places a request until the request is fully delivered.
A metric that measures how satisfied customers are with a product, service, or interaction, typically on a numerical scale.
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