Which KPI relates to the delivery performance of suppliers?

On-time delivery is a key performance indicator (KPI) that directly measures the effectiveness of suppliers in meeting their delivery commitments. This KPI assesses whether suppliers deliver goods and materials within the agreed timeframes, which is crucial for maintaining efficient operations and supply chain reliability. High on-time delivery rates indicate that suppliers can consistently fulfill orders as scheduled, contributing to smooth production processes and inventory management.

In the context of supply chain management, timely deliveries are essential not only for fulfilling customer demands but also for maintaining optimal inventory levels. If suppliers consistently deliver on time, it reduces the risk of stockouts and contributes to customer satisfaction, thereby enhancing the overall performance of the supply chain.

Other KPIs like stock turnover, inventory shrinkage, and supplier engagement index, while important in their own right, do not specifically address the timeliness of supplier deliveries. Stock turnover reflects how quickly inventory is sold and replaced, inventory shrinkage relates to loss of product due to theft or damage, and supplier engagement index measures the relationship and communication quality between a company and its suppliers. None of these KPIs focus solely on the delivery performance aspect that on-time delivery directly targets.