Definitions – Combined target measures
The priority target measures can be combined in different ways, to create Combined target measures.
STAND has defined 3 examples:
Target measure Delivery Order – Availability
The target measure “Delivery Order” gives the proportion of the orders that are properly delivered.
Definition:
| Quantity of complete orders delivered | = Level of Order Delivery |
| Total number of orders ordered |
A complete delivery order contains all ordered sales units, in the correct quantity
Availability will primarily be measured as the priority target measure “Proper Quantity – Availability”, but to calculate the combined measurements below, it is a prerequisite that “Delivery Order – Availability” is calculated.
Complete orders at the right time – Availability & Reliability
The target measure describes both accessibility and reliability in the interaction.
The target measure is composed of the target measures:
- Delivery of Order – Availability
- At the right time – Reliability.
Definition:
| Availability expressed per order
– Quantity of late or early delivery orders |
= Complete orders at the right time |
| Total quantity of orders |
Only one error per. order is counted
The measurement of “Complete Orders at the Right Time” shall be done at the place of arrival. At Incoterms Ex Works delivery terms, this is the supplier’s ramp
The perfect order
This is the most demanding target measure and measures all types of deviations regarding complete orders.
The target measure is composed of three previously defined target measures:
- Delivery of Order – Availability
- At the right time – reliability
- Correct administration – Security
Definition:
| Quantity of complete orders delivered
– late or early delivery orders – Orders with missing or incorrect documents – Orders with credit / debit notes |
= The perfect order |
| Total quantity of orders |
Only one error per. order is counted
If both the supplier and the customer’s obligations are considered in the target measure, the target measure represents the performance that the parties create in common.
Examples of calculation of service level for combined target measures can be found in the document
Service level is measured in %
Target measures Delivery Order – Availability
Example 1:
If 10 orders are missing 1 sales unit in one order at the time of delivery, service level is 90%.
Example 2:
If there among 10 orders is missing 1 sales unit in one order and 50 in another order at delivery time, service level is 80%.
Complete orders at the right time – Availability & Reliability
Example 1:
If one of 10 orders ordered is missing 6 sales units in one order and another order is delayed, the Complete Order service level is 80%.
Example 2:
If there are 10 orders, 2 orders are out of time, and one of the orders that are not in time is also incomplete, the service level of complete order is 80%.
The perfect order
Example 1:
If there among 10 orders are missing one sales unit on one order. Another order is delivered too late. The third order has generated a credit note, the service level is 70%.
Example 2:
If there among 10 orders is missing 1 sales unit in one order and the same order is delivered prematurely. Another order of products has errors and has generated a credit note, the service level is 80%.
