Importance Of Delivery Performance In Fmcg's

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Delivery Performance in FMCG’s:

In today’s competitive business environment, customers require dependable on-time delivery from their suppliers. From a customer responsiveness perspective delivery performance is probably one of the most important supply chain service metric for any FMCG company. [1]

Delivery Performance can be defined as the level of ability of a supplier to meet the customer expectations by delivering the products and services on-time and in full.

Importance of Delivery Performance

Delivery performance gives an indication of how successful a company’s supply chain is in providing products and services to its customers It speaks about a vendors (HP’s) predictability to ship the products as requested by the partners Delivery
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For e.g. Partner E requires all lines on the shipment to be delivered for the order to be considered complete and on time. What this means is that if HP misses even few units on any one line, the entire line is considered late. This introduces a huge variability in the delivery performance measurement by partner and the overall average goes down.

Another reason why the Delivery performance shows huge variability is the availability of the product (inventory at the DC) when the purchase order is received. This is closely tied to the Demand planning and forecasting. Having the products available

Third major factor is the financial targets set within the company that limit or help with the delivery performance depending on the objectives for the quarter. Improving delivery performance is associated with a cost so the objectives have to be balanced and tradeoffs have to be made to adhere to the company’s overall financial

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