Delivery precision: KPI for delivery accuracy
Delivery precision is the ratio of the number of deliveries arriving within the agreed time window to the total number of deliveries made, expressed as a percentage. Delivery precision, also known as on-time delivery (OTD), is a KPI in last-mile logistics that measures the reliability of the delivery process from the end customer’s perspective.
How do you calculate delivery precision?
The calculation is simple, but interpreting the result requires context. The formula:
Delivery precision (%) = (Number of on-time deliveries / Total number of deliveries) x 100
A delivery counts as on time if it takes place within the agreed time window. In most Belgian last-mile operations, this is a 2-hour window. A delivery outside the window, a failed delivery or a cancellation counts as not on time.
Benchmarks: what constitutes a good score?
Not every sector applies the same standard. In last-mile logistics for large goods, the following benchmarks apply:
| Score | Assessment |
|---|---|
| < 85% | Below standard, immediate process optimisation required |
| 85% - 92% | Market average for high volumes |
| 92% - 97% | Above average, industry-leading level |
| > 97% | Excellent, top 10% in the sector |
Delivery precision versus related KPIs
Delivery precision measures only time accuracy. To interpret this KPI correctly, one must understand how it differs from three related metrics:
- First Attempt Delivery Rate (FADR): measures whether a delivery is successful on the first attempt, regardless of the time. A delivery outside the time window counts as successful for FADR, but not for delivery precision.
- On-Time In-Full (OTIF): measures both the timeliness and completeness of a consignment. OTIF is more commonly used in B2B supply chains than in B2C last-mile delivery.
- Net Promoter Score (NPS): measures customer satisfaction via willingness to recommend. NPS is an outcome KPI, whilst delivery precision is a process indicator. Higher delivery precision correlates positively with a higher NPS (source: Bain & Company, 2022).
Factors influencing delivery precision
A low score is rarely the result of a single bottleneck. In practice, multiple operational factors simultaneously influence the outcome. Six factors are decisive:
- Route planning quality: smart route planning incorporates traffic forecasts and reduces instances of driving time overruns.
- Customer communication: proactive SMS notifications with a track-and-trace link reduce the percentage of missed deliveries because the end customer knows when the driver will arrive.
- Time slot length: a 4-hour slot yields a higher score than a 2-hour slot for the same route load.
- Hub location: a hub close to the city shortens the driving distance per stop and increases the likelihood of deliveries being made within the time window.
- Vehicle load: overloaded vehicles increase the likelihood of delays due to loading time and weight.
- Driver experience: trained drivers with knowledge of local conditions consistently achieve higher scores.
How can you improve delivery precision?
Low delivery precision is rarely the result of a single cause, but rather the result of multiple minor shortcomings that accumulate. The greatest gains come from adjustments that do not require major investment. The four most effective interventions are:
- Focus on real-time route optimisation: dynamic planning automatically adjusts the order of stops in the event of traffic jams or customers being absent.
- Send a text message 30 minutes before arrival: customers who receive a notification are more likely to be present, thereby increasing the percentage of successful first attempts.
- Monitor performance by driver and by route: detailed data identifies which routes or drivers consistently underperform.
- Increase hub density on the city outskirts: an additional hub shortens the daily route distance and increases the buffer time per stop.
Find out how VPD monitors delivery accuracy via KPI dashboards.