The Impact of Purchasing Capabilities on Delivery Performance

Hanghøj, Astrid

doi:10.1080/16258312.2015.11517364

Cited by 5 publications

(1 citation statement)

References 65 publications

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“…On-time delivery is one of the main objectives in supply chain management and logistics. Delivery reliability has a significant effect on customer satisfaction and company performance (Golini and Kalchschmidt, 2011;Al-Shboul, 2017;Tracey and Leng Tan, 2001) and is also one of the main factors when companies evaluate supplier performance (Forslund and Jonsson, 2010;Hanghøj, 2015;Choon Tan et al, 2002). In some cases, quantifying the benefit of on-time delivery, or cost of late delivery, is straightforward.…”

Section: Introductionmentioning

confidence: 99%

What is the value of delivering on time?

Niemi

Hameri

Kolesnyk

et al. 2020

JAMR

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PurposeDelivery punctuality is essential in supply chain management, yet the cost of untimely delivery is usually assumed to be given or based on intuition and not quantified by facts.Design/methodology/approachThe authors used a data set containing detailed transaction data for a nine-year period on orders and deliveries of sport goods. The methodology is based on applying a polynomial distributed lag model to longitudinal data on supply chain transactions.FindingsThe results indicate that small delivery delays up to two weeks decrease the sales by maximum 10% during a period of 3–4 weeks. Longer delays, up to 45 days, have a larger negative effect on sales, which can also last longer. For this case company, the estimated lost sales due to late deliveries (=5 days) were 5.1% of the delivery value. The longer delays got, the large the cost was: delays at least 45 days long were the most costly causing almost 40% of the estimated lost sales.Practical implicationsThis study offers a methodology for quantifying lost sales due to delivery delays and estimating how long the poor delivery performance affects retailers' order behaviour.Originality/valueThe results give a quantitative decision-making tool for supply chain managers to estimate the profitability of investments in the supply chain performance, especially on improving punctuality.

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