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Predicting Late Suppliers Deliveries

28 March 2021

How companies can predict suppliers' late deliveries with the use of advanced analytics and a systematic approach

IDAS Supplier Portal

Poor on-time delivery (OTD) performance from suppliers impacts more than customers. It’s also an indicator of poor production efficiency and materials handling procedures. Consistent OTD problems can negatively affect many other areas of a company’s supply chain. Imagine the impact of a material shortage on the production process, the delayed schedules, and the extra labor costs for waiting. Not to mention costs of amending production lines, extra shipping, and addressing a flood of customer complaints.

While most supply chain organizations strive for 99% OTD from suppliers, most will be around 80-85% at best. Here’s a look at OTD performance per the American Productivity and Quality Center The use of advanced prediction algorithms to foresee your supplier's on-time parts delivery problems and not after they shut your lines down has a great positive impact on OTD performance.

These prediction systems help set expectations and give supply chain managers the tools to make the right decisions for on-time deliveries, eliminate hidden factory costs of late parts, redeploy labor from expediting to value-added activities, and focus on growth.

We've based our PPA (parts prediction algorithm) on the analysis of 4 suppliers data inputs from various systems:

  • Historical inbound shipments Data from the ERP system
  • Manufacturing data via the suppliers portal
  • PO confirmations in the supplier portal
  • Supplier portal updating trends

After studying and analyzing the big data gathered from the above systems, the algorithm provides a scoring system that is adjusted on a supplier level per the engagement level allocated to each supplier and the score is grouped into 3 main levels:

  • Red < 65 (parts are late or will be late in the next 90 days - Need immediate attention)
  • Yellow > 65 <85 (parts have a chance to be late in the next 90 days – Need some attention)
  • Green > 85 (parts will be on time in the next 90 days)

This prediction system gives an indicator for manufactured parts at suppliers and gives supply chain managers the tools to communicate and make the right decisions to achieve on-time deliveries, eliminate hidden factory costs of late parts, redeploy labor from expediting to value-added activities and focus on growth and not resolving delivery issues.

This is of huge potential benefit to manufacturing companies, especially those that rely on just-in-time component and materials delivery, and will improve OTD rates and assemble lines shutdowns with the costs associated with such problems.

Stop chasing your parts, past dues and line stoppages. Its time to become proactive!