When ordering online, one of the key factors in how customers determine which products to buy is how quickly the supplier can ship the product. Quick shipping turnaround is no longer a nice to have, but a must-have in the eyes of consumers. This concept not only applies to customers but also applies to businesses. When signing a purchase order, businesses agree upon a Must Arrive By Date [MABD]. This blog will uncover why on-time delivery [OTD] is imperative for businesses, the ramifications for poor OTD, and how transportation/ logistics professionals can yield industry-best service.
Poor OTD Stops Production
Manufacturing relies on several moving pieces to be successful. When one piece breaks down, a chain reaction occurs. Delivering goods on time is a crucial piece for manufacturers especially when raw materials are needed to keep production running. A recent example that comes to mind is the automobile semiconductor chip shortage that forced automakers to close production lines and/or remove popular features such as heated seats. According to motortrend.com, in 2021 the shortage cost the global auto industry $210 billion in lost revenue.
Poor OTD Leads to Empty Shelves
Imagine walking into your favorite store ready to make a purchase and the item is nowhere to be found in the store. Empty shelves equal upset customers and poor customer experiences. And when items are essential, such as baby formula and medicine, empty shelves can lead to public panic. So the next time you see a large truck on the road, be thankful and remember that the driver is a critical part of ensuring your local shelves remain stocked.
Poor OTD Leads to Increased Transportation Cost
Big box retailers utilize MABD and on time in full [OTIF] as key performance metrics which hold their suppliers accountable. To help avoid delays, companies like Walmart and Kroger charge penalties for late deliveries. Fines can be hundreds of dollars, which can quickly add up to thousands of dollars if not controlled. These penalties ultimately increase the overall transportation cost for the shipper and eat into the company’s bottom line.
Achieving Industry-Best OTD
Transportation professionals have a difficult job. They need to make sure that goods always arrive on time, even though there are circumstances outside their control that negatively impact delivery time. Innovative shippers have turned to award-winning software to automate freight procurement. In short, the software uses AI to dynamically match compliant carriers to shipper loads when needed so shipments always arrive on time, as planned. Our software customers have not only reduced truckload cost, but in the month of November 2022, they achieved 100% OTD.
This blog is written by Kelly Koslow Dilling, a Client Success Advisor at Sleek Technologies. Kelly has 17 years of experience as a Logistician and has been with the Sleek team for 3 years. She has a strong dedication in proactive communication and helping customers with conflict resolution.