The improved ability of an organization to deliver a product or service that meets to meet customer requirements against a specification for delivery time. While price has always been a key determinate in the purchasing decision, the emphasis on timely delivery is becoming increasingly important, for both individual consumers and subassemblies.
On-time delivery is measured as percent achievement within a window of time that brackets the customer-requested date and/or the business' committed date and is not improved by quoting long lead times and turning down tough business. Using time as a metric allows for improved quality and decreased costs as process times are reduced through systematic barrier removal.
The key element to improving on-time delivery is the standardization of the criteria by which each supply chain segment is measured against. Problems arise when different segments define on-time delivery differently and in ways that are not tied to the commitment date to the customer. By aligning all internal lines to a common standard it is easier to drive different parties towards what they need to achieve.