Introduction
On-time delivery (OTD) is one of the priorities of many businesses across the globe because of its impact on customer satisfaction and the overall success of the firm. Many companies now understand the importance of OTD, especially in reducing cost and creating values. Nonetheless, even though many companies now appreciate the importance of OTD, they still struggle to implement it to gain a competitive advantage in the market. For instance, KFC that is expected to implement OTD effectively faced a significant problem in 2018 when it could not deliver chicken to its customers across the UK due to the shortage of chicken. Giant companies like DHL and Amazon have witnessed the same problem. On the other hand, there are some companies, especially in the airline industry like Airbus and Boeing that are using OTD to gain a competitive advantage in the market. Boeing continues to dominate the industry because of its OTD. It is important for companies to identify the cause of poor OTD and find the most suitable solution to enhance customer satisfaction and gain a competitive advantage while improving the success and sustainability of their operations.
Factors Contributing to Poor OTD
Many factors are associated with poor OTD, even though they may be unique to every business. However, based on findings from various sources, it seems that stock-out is the leading cause of poor OTD in many businesses. A significant number of businesses have run out of stock, making it impossible or challenging to deliver goods or services within the required time. A perfect example is the KFC fiasco that occurred in the UK when the company ran out of the chicken stock. With the insufficient supply of chicken, KFC was forced to close a number of its stores in the UK while leaving many customers angry, disappointed, and unsatisfied. Stock out is caused by many factors such as underestimating the demand, late delivery by suppliers, under-ordering, and product quality issues (Rivera & Kashiwagi, 2016) . Therefore, it is essential for companies to ensure that they have enough stock at any given time. According to Rivera and Kashiwagi (2016), poor planning is the reason many firms to face stock out challenges. Stock-out is a leading problem in poor OTD in many industries.
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The high number of parties involved in the supply chain process is also another factor that is contributing to poor OTD. The supply chain is made up of many parties that require effective coordination and communication to ensure OTD. Based on the argument by Rivera & Kashiwagi (2016), supply chain management is made up of various silos of communication. Every silo is communicating through technical jargon that can result in complexity and challenges in the identification of inefficiencies in the supply chain management process. The more complicated the supply chain management is, the more poor OTD is likely to occur. The supply chain process should be made simpler to improve delivery ( Rivera & Kashiwagi, 2016). The nature of the supply chain affects OTD.
Besides, many external factors can result in poor OTD. A change in weather condition is one of the external factors that can lead to poor OTD in many industries. For instance, it is possible for bad weather conditions like excessive rainfall to slow down the transit, leading to delayed delivery. The second common external factor is labor disputes and strikes, which is common in some industries. A company is likely to fail to delivery is goods on time when its employees are striking or boycotting duties ( Rivera & Kashiwagi, 2016). For instance, the DHL strike that occurred in Germany in 2015 had a significant impact on its delivery system, resulting in many delays. An industrial dispute is another problem facing OTD. Apart from strikes, civil disturbances can cause poor OTD, particularly in countries that are facing political instability. In many cases, companies have no control over external factors, even though they can try to address the challenges by taking proactive measures. External factors, therefore, are major and complicated risks to OTD in many industries (Rivera & Kashiwagi, 2016).
Poor OTD can also be caused by customers, even though this rarely occurs. Some customers order for goods but they fail to make payment within the required time. In this case, a company may be forced to withhold delivery until the customer makes payment ( Rivera & Kashiwagi, 2016). Also, a customer can change the delivery address after the delivery information is entered into the system. As a result, a firm may be forced to initiate package redirection, which requires additional time to execute. Besides, some customers live in places that cannot easily be accessed, mainly due to poor roads or congestion.
Improving OTD
One of the leading solutions to poor OTD delivery is the implementation of root-cause system or analysis (RCA), primarily because the problem is caused by many factors that may be interrelated. RCA is one of the major techniques that are used by people and organization to solve both simple and technical problems. RCA is aimed at identifying the original cause of the problem. RCA is based on the assumption that events are always interrelated and that an action in a given area can trigger action in another, resulting in a complicated problem (Peerally et al ., 2017). RCA has successfully been used in many sectors to address various problems.
However, one of the main drawbacks of RCA is that it cannot lead to a holistic solution to the problem of poor OTD. As the name suggests, it is possible for organizations or people to only focus on a single root cause of the problem while ignoring other causes that should be considered (Peerally et al ., 2017). Focusing on root cause alone can result in flawed reductionist view, which cannot lead to an effective solution to the problem. Besides, RCA can lead to weaker solutions because it cannot be used to identify latent factors that are causing the problem.
The strategic location of warehouses is another solution that can be used to improve OTD. A lot of delay in delivery is caused by external factors such as severe weather and traffic congestions. Many businesses rely on road networks to deliver goods and services to customers in various locations. However, with increased tragic jam in many cities and towns, the use of roads is no longer reliable, as it causes many delays. Therefore, to overcome the external causes of poor OTD, a firm should strategically locale many warehouses in many places. Apart from improving OTD, the strategic location of warehouse reduces the cost of transportation significantly (Ramaa, Subramanya & Rangaswamy, 2012). Transportation always accounts for the highest percentage of production cost, which can be reduced through a strategic location of warehouses. It would be cheaper, faster, and convenient to deliver goods to customers who are located near a warehouse.
Nevertheless, the cost of establishing a warehouse is always high, especially when they are located in towns where land is expensive. A business would have to incur a lot of financial costs when it establishes many warehouses to address poor OTD. Besides, a warehouse requires wide space that may not be available in strategic locations such as the central business district (CBD) (Ramaa, Subramanya & Rangaswamy, 2012). Many warehouses are likely to increase the cost of production, even though it may reduce the cost of transportation.
The Best Solution and Justifications
RCA is the best solution that can be used to address poor OTD. Unlike other problems that can be caused by a single factor, poor OTD delivery is influenced by many issues. RCA solutions mainly involve five main steps that include root cause identification, gathering information, data analysis, prioritization an implementation of solutions, and monitoring the results (Peerally et al ., 2017). Peerally et al . (2017) point out that based on the analysis of the causes of poor OTD, it is possible that internal or external factors can cause the problems. The step would involve the identification of the leading causes of poor OTD. However, the solution would not only focus on the main cause but any other factor that can result in poor OTD. The identification of the root cause of the problem is the most important step in finding the most relevant and appropriate solution to the issue.
The second main step is to gather information to have a clear understanding of the causes of the problem and why they occur (Peerally et al ., 2017). The information should be collected from various sources, which must be valid and reliable. Thirdly, the information or data gathered should be analyzed to have a clear picture of the specific cause of the poor OTD. The analysis should also help in identifying the trends in the delivery system or process (Peerally et al ., 2017). The fourth stage would be to implement the solutions to address the problem of poor OTD. Besides, it is essential to monitor the progress or the impact of the solutions. The solution is expected to improve OTD significantly after its implementation. Therefore, the problem of poor delivery can be solved by using RCA.
RCA is the best solution because it helps in identifying the root cause of the problem. Therefore, one major reason why business should use RCA is that it can be used to determine the leading cause of poor OTD. A solution should always be aimed to address a specific cause of the problem (Bowie, Skinner & De Wet, 2013). Unlike other solutions that focus on factors that cause the problem generally, RCA is concerned with specific root causes, resulting in a long-term and sustainable solution.
RCA is also the best solution to the problem because it helps in identifying the relationship between causes and symptoms of a given issue. At the same time, RCA provides valid and tangible evidence of the cause and effects, including the solutions that should be implemented (Bowie, Skinner & De Wet, 2013). As a result, businesses can use RCA to formulate long-term solution strategies to address poor OTD. Also, RCA is simple and can easily be implemented.
Concerns over RCA
The main concern over RCA is knowing whether the root cause of a problem has been identified. Many businesses may not know when they have arrived at the root cause of poor OTD, making RCA completely and arbitrary process (Peerally et al ., 2017). Hence, companies that have no experience using RCA may not use the system effectively address the system. At the same time, there are many latent causes of a problem that cannot easily be identified, even though they may be the root cause. There are a lot of uncertainties about the effectiveness of RCA.
RCA can also lead to political hijack because of the possibility of biases, especially during data collection and analysis. In the health care sector, for instance, RCA has led to a compromise between depth and accuracy of data, leading to ineffective solutions. The data collection and analysis are always influenced by the need to maintain the status quo or maintain a given interpersonal relationship in the workplace (Peerally et al ., 2017). RCA, therefore, lacks objectivity, which essential in finding a solution to problems such as poor OTD.
Conclusion
OTD is important because it improves customer satisfaction, helps in creating value, and improves competitiveness in businesses. OTD has made many companies be successful, especially by gaining a competitive advantage in the market. However, many businesses still struggle to implement OTD. To address OTD challenges, business should use an RCA solution model, which helps in the identification of core causes of the problems and the most suitable solution. Poor OTD is caused by many factors that can only be identified through the RCA process. Business should use effective strategies to achieve OTD.
References
Bowie, P., Skinner, J., & de Wet, C. (2013). Training health care professionals in root cause analysis: a cross-sectional study of post-training experiences, benefits, and attitudes. BMC Health Services Research , 13 (1), 50-58.
Peerally, M. F., Carr, S., Waring, J., & Dixon-Woods, M. (2017). The problem with root cause analysis. BMJ Qual Saf , 26 (5), 417-422.
Ramaa, A., Subramanya, K. N., & Rangaswamy, T. M. (2012). Impact of the warehouse management system in a supply chain. International Journal of Computer Applications , 54 (1).
Rivera, A., & Kashiwagi, J. (2016). Identifying the causes of inefficiency and poor performance of the delivery of services. Procedia Engineering , 145 , 1378-1385.
