Procurement Glossary
On-Time Delivery (OTD): Key figure for punctual deliveries in Procurement
November 19, 2025
On-Time Delivery (OTD) is a key performance indicator in Procurement that measures the proportion of deliveries that arrive on the agreed date. This metric enables companies to assess the reliability of their suppliers and optimize supply chains. Find out below how OTD is calculated, which factors influence on-time delivery and how you can use this metric strategically.
Key Facts
- OTD measures the percentage of on-time deliveries in relation to the total number of orders
- Typical target values are between 95-98% depending on the industry and criticality of the materials
- The key figure directly influences production planning, stock levels and customer satisfaction
- Modern ERP systems enable automated OTD evaluations in real time
- Poor OTD values can lead to rush orders, additional costs and production downtime
Contents
Definition and meaning of On-Time Delivery (OTD)
On-time delivery refers to the ability of suppliers to provide goods and services on the agreed delivery date. This key figure is expressed as a percentage and is a key indicator of supplier performance.
Key aspects of adherence to delivery dates
On-time delivery encompasses several dimensions of delivery performance. In addition to the pure delivery date, delivery windows, partial deliveries and the completeness of the shipment also play a role.
- Exact adherence to the agreed delivery date
- Consideration of defined tolerance ranges (e.g. ±1 day)
- Completeness of the delivered quantities
- Quality conformity of the delivery
OTD vs. On-Time In-Full (OTIF)
While OTD only looks at the time component, On-Time In-Full extends the assessment to include quantity and quality aspects. OTIF therefore represents a more comprehensive assessment of supplier performance.
Importance of OTD in Procurement
In strategic Procurement , OTD serves as the basis for supplier evaluations and contract negotiations. The KPI directly influences supplier evaluation and enables data-based decisions to be made when selecting suppliers.
Measurement, database and calculation
The precise measurement of OTD requires systematic data acquisition and standardized calculation methods. Modern systems largely automate these processes.
Calculation formula and data sources
OTD is calculated using the formula (number of on-time deliveries / total number of deliveries × 100): (number of on-time deliveries / total number of deliveries) × 100. ERP systems, incoming goods postings and shipping notifications serve as data sources.
- Order data with agreed delivery dates
- Goods receipt postings with actual delivery data
- Tolerance definitions for delivery windows
Automated evaluation systems
Modern procurement systems enable the automatic calculation of OTD values. The goods receipt lead time is taken into account as an additional parameter.
Periodic valuation cycles
OTD evaluations are typically carried out on a monthly or quarterly basis. Both absolute values and trends over several periods are analyzed in order to assess delivery call-off reliability.
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Interpretation & target values for OTD
The correct interpretation of OTD values and the definition of appropriate target values are crucial for effective supplier management. Industry-specific differences must be taken into account.
Sector-specific benchmark values
Typical OTD target values vary depending on the industry and the criticality of the materials. In the automotive industry, 98-99% is often the target, while other industries are satisfied with 95-97%.
- Automotive industry: 98-99% (just-in-time production)
- Mechanical engineering: 95-97% (longer planning cycles)
- Consumer goods: 90-95% (higher tolerance for standard articles)
Tolerance ranges and delivery windows
The definition of tolerance ranges has a significant influence on OTD measurement. Typical delivery windows range from ±1 day for critical materials to ±3 days for standard items. The service level is adjusted accordingly.
Correlation with other key figures
OTD correlates strongly with other procurement metrics such as the fill rate and directly influences the overall performance of the supply chain. A holistic view of all relevant metrics is required for a meaningful evaluation.
Risks, dependencies and countermeasures
Poor OTD performance can have a significant operational and financial impact. A systematic risk analysis helps to develop effective countermeasures.
Operational risks with poor OTD
Delayed deliveries can cause production downtime, rush orders and increased inventory costs. The expedite rate typically increases with poor OTD performance.
- Production interruptions due to material shortages
- Additional logistics costs for express deliveries
- Increased safety stocks to minimize risk
Supplier dependencies and single-source risks
High dependence on individual suppliers increases the impact of poor OTD performance. Diversification strategies and alternative procurement sources reduce these risks.
Preventive measures and monitoring
Continuous monitoring of supplier evaluation and early escalation processes help to minimize risk. Regular supplier meetings and improvement plans are essential for sustainable OTD optimization.
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Practical example
An automotive supplier implements an OTD monitoring system for its 150 main suppliers. Monthly evaluations show that 20% of the suppliers have an OTD below 95%. The company then conducts structured supplier meetings and jointly develops improvement plans. After six months, the average OTD rises from 92% to 97%, reducing rush orders by 40% and cutting storage costs by 15%.
- Systematic data acquisition via ERP system
- Monthly supplier evaluation with OTD as the main criterion
- Development of specific improvement measures per supplier
Current developments and effects
Digitalization and new technologies are changing the way OTD is measured and optimized. Artificial intelligence is playing an increasingly important role in this.
AI-supported forecasting models
Artificial intelligence enables more accurate predictions of delivery dates by analyzing historical data and external factors. Machine learning algorithms identify patterns and risk factors that traditional methods overlook.
- Predictive analytics for delivery date forecasts
- Automatic risk detection for critical deliveries
- Dynamic adjustment of safety stocks
Real-time tracking and transparency
IoT sensors and GPS tracking enable shipments to be tracked in real time. This transparency improves planning and reduces uncertainties in the lead time.
Sustainability aspects in the OTD assessment
Environmental factors are becoming increasingly important when evaluating supplier performance. Sustainable transportation routes can influence OTD, but are increasingly being viewed as a factor of equal importance to pure adherence to delivery dates.
Conclusion
On-Time Delivery is a fundamental KPI for successful supply chain management and supplier management. The systematic measurement and evaluation of OTD enables data-based decisions and continuous improvements in procurement. Modern technologies such as AI and real-time tracking open up new possibilities for more precise forecasting and proactive risk management, which sustainably strengthens supply chain stability.
FAQ
What is the difference between OTD and on-time delivery?
OTD is the English term for on-time delivery and measures the percentage of on-time deliveries. Both terms describe the same key figure, although OTD is more common internationally and is often used in global companies.
How is OTD calculated for partial deliveries?
There are different calculation approaches for partial deliveries: Either each partial delivery is assessed separately or the order is only considered on time when all parts have been delivered on time. The chosen method should be applied consistently and communicated clearly.
Which tolerance ranges are usual for OTD?
Typical tolerance ranges are between ±1 and ±3 days, depending on the criticality of the materials and industry requirements. Just-in-time production requires tighter tolerances than standard procurement with longer planning cycles.
How can OTD performance be improved?
You can achieve improvements through regular supplier feedback, joint improvement plans, alternative procurement sources and preventive risk analyses. Digital tools for tracking and forecasting support the continuous optimization of supplier performance.
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