On Time Guarantees from Suppliers Mitigate Cost Impacts

OTD GreenLeaf Industries

A key metric that measures a company’s delivery performance and supply chain efficiency is on-time delivery (OTD). It is a ratio (expressed as a percent) of the number of customer orders shipped by the agreed-upon date versus the total number of orders for a specific period. It is a metric that many manufacturers use to set themselves apart from the competition. At GreenLeaf we define OTD more strictly, and we hold ourselves accountable for achieving 100%.

The GreenLeaf OTD Guarantee

We believe that some customer expectations are non-negotiable: unmatched service and reliable delivery. Our unmatched service means we treat your business as if it were our own. We don’t like late deliveries from our suppliers, and we don’t expect you to live with late deliveries from us. We believe your product should not only ship on time, but the shipment must have the right quantity of the right parts in the right packaging with the right label and the right label information. Only then do we consider your delivery on time.

OTD

Operational efficiencies achieved through proven, reliable systems ensure our customers receive their products on time and as expected. Components of our systems work together to ensure we can meet delivery expectations.

  • We maintain the free capacity to handle emergency orders and sustained spikes in production.
  • We maintain adequate safety stocks of raw materials and finished goods to meet customer orders.
  • We operate as a “visual factory” so that employees of all levels are keenly aware of performance against the production schedule.
  • We incorporate detailed, customer-specific packaging requirements into our work instructions.

We put as much effort into delivering your custom injection molded products on time as we do in building them.

Why Does On-Time Delivery Matter?

If your current plastic molder delivers late orders, you understand the frustration involved. But more than frustration, late deliveries can be costly.

When you engage with a plastic injection molding partner, you expect that the company will deliver your products on time in good faith. Occasionally, unexpected delays occur, but they should not be frequent, and your supplier should take complete responsibility to find the root cause and fix it.

There is an adage that says 20 percent of customers contribute to 80 percent of sales. So, a high on-time delivery rate for the top spenders is critical for customer retention. Many companies will focus efforts on this group. But what if you are not among the A-list customers?

A company that values its customers will ensure operational efficiency to manage its supply chain predictably – to benefit all customers.

Consistent problems with OTD can disrupt your business, impact other areas of your supply chain, and cause irreparable damage to your customer relationships – costly ramifications.

A Word of Caution About On-Time Delivery Metrics

OTD metrics can indicate operational efficiency but just be aware when comparing several manufacturers that this metric is one of the most inconsistent metrics used. There are several reasons for this, including inconsistency in systems (manual or various ERP systems), varying calculation methods (by value, items, full shipment, or partial shipment), or order dates are moved to rectify financial metrics (such as aged order backlog measurements). On-time delivery often doesn’t consider that the order is correct where quantity, items, and even labeling are concerned.

One way to ensure you are comparing apples to apples is to ask how the calculation is done or look for a partner that offers an on-time delivery guarantee. A guarantee that compensates you in some way will ensure the company has the processes in place to safeguard its delivery performance. Having “skin in the game” will ensure that late deliveries are avoided.

Many companies consider late deliveries just part of doing business and expect you to plan around their inefficiencies. So, finding a plastic injection molding company that guarantees delivery is rare, but at least one exists – GreenLeaf Industries.

Contact us to learn more about our services and see how our on-time delivery promise can benefit you.