Definition
The proportion of order lines shipped on time to the customer-requested date out of all shipped order lines; it is one of Danaher's Core Value Drivers. Data is always taken against the customer-requested date; when overdue accounts for <1.5% of monthly sales, OTD is the primary metric; at ≥1.5%, OTD and overdue are monitored simultaneously (two-tier version, source p130, engine default); another official document gives a three-tier version, specifying that when overdue is >5%, only overdue is monitored and OTD is no longer primary (source "Guidelines for Daily Management Visuals…" p12). On the E-Kanban side, lateness is determined using the original expected date; supplier rescheduling cannot wash away the record.
In detail
On-Time Delivery (OTD) is the percentage of orders delivered on time according to the customer's requested date and is one of Danaher's core value driver metrics. It measures supply chain reliability and reflects the capability of the entire process from order to delivery. Unlike internal production lead time, OTD focuses on the customer's perspective, and data must be based on the customer's requested date, not the supplier's committed date. When overdue orders exceed 5% of monthly sales, OTD loses its discriminating power, and root causes should be addressed first. Typical outputs include monthly OTD reports used to drive improvement.
Example in practice
A company's OTD was only 85%, and customer complaints increased. Analysis found that delays were mainly due to frequent production plan changes and supplier delays. They implemented the PSI process to strengthen production-sales coordination and optimized supplier management. Three months later, OTD improved to 95%, and customer satisfaction significantly improved.