What is Delivery Cycle Time?

Delivery cycle time is the time span between the acceptance of an order from a customer to the ultimate delivery of the product to the customer. This is a critical process measurement, since being able to process an order within the minimum possible amount of time is a marketable skill that can be used to attract more customers. Management wants to see this figure at the level of the individual order so that it can investigate those orders that require an unusually long time to process.

How to Calculate Delivery Cycle Time

There is a two-step process involved in calculating delivery cycle time, which is as follows:

Identify the start and end points. Determine the time when an order is placed, and when it is delivered to the customer. These are the start and end points.
Subtract the start time from the end time. Subtract the order placement date and time from the delivery date and time to arrive at the delivery cycle time.

In addition, you might consider calculating the average delivery cycle time for a batch of orders. To do that, add up all individual delivery cycle times and divide the sum by the number of orders, to arrive at an average delivery cycle time.

Delivery Cycle Time Best Practices

A business has several options for improving its delivery cycle time, and therefore the associated customer satisfaction level. One option is to have customers directly enter their orders into the company’s order processing system, which eliminates order entry time and reduces order errors. Another option is to overstock all variations on the inventory being sold, so that instances of inventory backorders are quite rare. Finally, the seller could use an overnight delivery service to ensure that the completed order reaches the customer as soon as possible.