What is Delivery Capability?
Delivery capability indicates the extent to which a company can deliver its goods by the date requested by the customer. Delivery capability is represented as a percentage. Another term for delivery capability is delivery readiness.
Delivery capability influences customer satisfaction and is therefore of great importance. Customers generally want to receive their ordered goods as quickly as possible. If promised or desired delivery dates are frequently not met, customers may switch to competitors or leave negative reviews.
When customer order patterns are stable and supply chains are uninterrupted, ensuring high delivery capability is relatively straightforward. Challenges arise when customer order patterns change frequently, leading to highly fluctuating order volumes. Supply shortages in material procurement can also reduce delivery readiness. High delivery readiness requires effective inventory management. Lastly, poor communication between purchasing and sales can lead to decreased delivery readiness.
Delivery readiness depends on the following factors:
- Ordering behavior
- Inventory management
- Supply chain management
- Internal communication and data flow
The following formula is used to calculate delivery readiness:
Delivery capability (%) = (Number of on-time deliveries at requested date x 100) / Number of confirmed dates
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