We deliver on time, don’t we?

“Mr Berends, I’m not really happy about your company’s delivery performance. Repeatedly, orders arrive too late, or are sent out in partial deliveries.” My goodness! That isn’t what you want to hear as an account manager. Customer satisfaction is of prime importance, yet this customer is complaining. How is this possible? Determinedly, I make my way to the logistics department. I’m going to really interrogate them, because this can’t possibly be true. Once there, I start my tirade about ‘the umpteenth time’, etc. etc. … The logistics manager remains calm, types something into the system, and finally he takes a printout from the printer. “Erwin, your complaint is unfounded. Look here, I have just printed out the delivery performance and this says that we have a 98% success rate. That actually isn’t too bad.” Unfortunately, I had to agree with him; 2% of issues really can’t underpin the complaints. What is going on? I decide to ring the customer to ask whether he measures the performance and whether he could possibly share these figures. Maybe things aren’t too bad and he is complaining about just the one small order that he was urgently waiting for. “I will send you a report, then you will see where things are going wrong. It’s strange that you don’t keep track of this yourselves.” Was the response when I phoned him. To which my answer was “we do monitor it, I’m just curious where the discrepancies are.” Finally, I compared his report with ours. The customer’s version shows an overall delivery performance of 25%. I prefer to deliver half of my orders as partial deliveries. I reconfirm the same orders with a later delivery time several times, and so forth. Don’t be shocked. Worse still: what a shambles we’d made. After investigating this, I found out what the problem was – our monitoring doesn’t take into account partial deliveries. If the first part of the order is delivered before the confirmed date, our system counts that order as being ‘on time’. It also counts from the most recently confirmed date, instead of the first delivery date given. This means we’re just deceiving ourselves. We thought we were doing really well, whereas our customer was dissatisfied, and rightly so!

This means that you should consult with the customer regarding how to jointly deal with the delivery performance, in order to ultimately send the correct KPIs and to ensure you’re not constantly caught off guard. Just imagine, you are just at the point of entering into a large contract with this customer and the customer brings up these complaints, along with substantiation. Negotiations will really be fun! During my time as a production planner, I was responsible for reporting on the production performance to the Supply Chain Planners. They were therefore my internal customer. I could cite a lot of examples, and no doubt you could too … monitoring or KPIs are very good tools to find out how your business processes are functioning, but I think that it is important for you and your customer to talk about the same basic principles. It’s still important that, together, you agree on how KPIs are defined, measured and interpreted. Discussing this after the event is always more difficult than doing this beforehand …