Procurement Glossary
Delivery performance: key figure for delivery reliability in Procurement
November 19, 2025
Delivery performance is a key performance indicator in Procurement that measures the reliability and punctuality of suppliers. It assesses the extent to which agreed delivery dates are met and therefore forms an important basis for supplier evaluations and strategic procurement decisions. Find out below what exactly delivery performance means, how it is measured and what impact it has on the procurement strategy.
Key Facts
- Delivery performance measures suppliers' adherence to delivery dates as a percentage
- Typical target values are between 95% and 99% depending on the industry
- Usually calculated as an on-time delivery rate (OTDR)
- Direct impact on production planning and stock levels
- Important building block for supplier evaluation and development
Contents
Definition and importance of delivery performance
Delivery performance refers to a supplier's ability to meet agreed delivery dates and deliver goods at the right time.
Core aspects of delivery performance
Delivery performance encompasses several dimensions of delivery reliability. In addition to pure adherence to delivery dates, aspects such as delivery completeness and delivery quality are also taken into account.
- On-time delivery: adherence to agreed delivery dates
- In-Full-Delivery: Complete delivery of the ordered quantities
- Right-Quality: Delivery in agreed quality
- Perfect order rate: combination of all aspects
Delivery performance vs. other supplier KPIs
In contrast to cost indicators, delivery performance focuses exclusively on temporal and qualitative aspects. While price indices measure cost development, delivery performance evaluates the operational reliability of suppliers.
Importance of delivery performance in Procurement
High delivery performance reduces safety stocks, improves planning reliability and minimizes production downtime. It is crucial for Kanban systems and just-in-time concepts, as these depend on reliable deliveries.
Measurement, database and calculation
Delivery performance is measured using various key figures and calculation methods that enable an objective assessment of supplier performance.
On-time delivery rate (OTDR)
OTDR is the most common method of calculating delivery performance. It is calculated as the percentage of orders delivered on time in relation to the total number of orders.
- Formula: (On-time deliveries / total deliveries) × 100
- Define tolerance window (e.g. ±1 day)
- Regular evaluation (monthly/quarterly)
Data basis and recording
Reliable data sources are required for precise measurement. ERP systems automatically record order data, delivery dates and goods receipts. The integration of Advance Shipping Notices significantly improves data quality.
Perfect order rate as an extended key figure
The perfect order rate combines delivery performance with other quality criteria. It takes into account adherence to delivery dates, quantity completeness, quality and correct documentation in a single key figure and thus offers a holistic assessment of supplier performance.
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Interpretation & target values for delivery performances
The correct interpretation of delivery performance indicators and the definition of appropriate target values are crucial for effective supplier management.
Sector-specific target values
Target values for delivery performance vary depending on the industry and product complexity. In the automotive industry, 98-99% is typically expected, while in other industries 95-97% is considered acceptable.
- Automotive industry: 98-99% OTDR
- Mechanical engineering: 95-97% OTDR
- Consumer goods: 92-95% OTDR
- Chemicals/pharmaceuticals: 96-98% OTDR
Tolerance window and evaluation criteria
The definition of tolerance windows significantly influences the delivery performance evaluation. Narrow tolerances (±1 day) promote precision, while wider tolerances (±3 days) allow flexibility. The choice depends on the criticality of the materials.
Trend analysis and continuous improvement
In addition to absolute values, the trend development of delivery performance is crucial. Deteriorations indicate systematic problems and require targeted measures. Regular carrier performance evaluations support the root cause analysis of delivery problems.
Risks, dependencies and countermeasures
Inadequate delivery performance harbors considerable risks for the entire value chain and requires systematic countermeasures.
Production and supply chain risks
Poor delivery performance leads to production downtime, increased storage costs and customer dissatisfaction. These effects are particularly critical for just-in-time production and cross-docking concepts.
- Production downtime due to missing components
- Increased safety stocks as a buffer
- Delays in customer deliveries
Supplier dependencies and single-source risks
A strong dependence on individual suppliers increases the impact of poor delivery performance. Diversification strategies and the development of alternative sources of supply significantly reduce these risks.
Preventive measures and risk minimization
Systematic supplier development and regular performance reviews sustainably improve delivery performance. Carrier performance analyses help to optimize transport logistics and reduce external factors influencing on-time delivery.
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Practical example
An automotive supplier implements systematic delivery performance monitoring for its 150 suppliers. The OTDR is measured monthly with a tolerance window of ±1 day. Suppliers with a performance below 95% automatically receive a notification and are requested to implement an improvement plan. By integrating Advance Shipping Notices, the average delivery performance was increased from 92% to 97%.
- Automated data acquisition from ERP system
- Weekly performance dashboards for critical suppliers
- Escalation process in the event of repeated delays
Current developments and effects
Digitalization and new technologies are fundamentally changing the measurement and management of delivery performance.
Digital transparency and real-time monitoring
Modern supply chain management systems enable real-time monitoring of deliveries. IoT sensors and GPS tracking provide precise information on delivery status and expected arrival times, enabling proactive measures to be taken in the event of delays.
AI-supported forecasts and optimization
Artificial intelligence analyzes historical delivery performance data and external factors such as weather or traffic. These analyses improve delivery forecasts and enable preventive measures to minimize risks.
- Predictive analytics for delivery delays
- Automatic supplier notification in the event of deviations
- Dynamic adjustment of safety stocks
Sustainability and delivery performance
Sustainability aspects are increasingly influencing the evaluation of delivery performance. Companies are taking CO2 emissions from transportation into account and prefer milk run concepts or consolidated deliveries, even if this can affect pure adherence to delivery dates.
Conclusion
Delivery performance is an indispensable key performance indicator for successful supply chain management and strategic procurement decisions. It enables objective supplier evaluations and forms the basis for continuous improvements in the supply chain. Modern technologies such as AI and IoT open up new possibilities for precise measurement and proactive control. Companies that systematically monitor and optimize delivery performance create sustainable competitive advantages through reliable and efficient procurement processes.
FAQ
What is the difference between delivery performance and delivery time?
Delivery performance measures compliance with agreed deadlines, while delivery time indicates the time between order and delivery. A short delivery time is of no use if deadlines are not met. Both key figures complement each other in supplier evaluation.
How is Delivery Performance calculated for partial deliveries?
There are different approaches for partial deliveries: Either each partial delivery is evaluated separately or the order is only considered fully fulfilled when all parts have been delivered on time. The chosen approach should be applied consistently and communicated clearly.
Which tolerance windows are appropriate for delivery performance?
Tolerance windows depend on the material type and production strategy. Critical components for just-in-time production require tight tolerances (±1 day), while standard materials allow larger windows (±3-5 days). Standardized definition and communication is important.
How can poor delivery performance be improved?
Improvements require systematic root cause analysis and targeted measures. These include supplier development programs, improved forecasts, alternative transport routes and, in the event of repeated problems, switching to more reliable suppliers. Regular reviews and clear target agreements are essential.
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