Delivery Schedule Adherence (DSA) is perhaps one of the most commonly known procurement Key Performance Indicators (KPI’s). It measures the timeliness of deliveries by suppliers against agreed requirement dates. The KPI is typically used as a barometer of supplier health to ensure that they are doing as required. The KPI is usually used in combination with others to present the bigger picture relating to supplier performance.
It’s importance shouldn’t be underestimated. Procurement’s end goal is to have the right parts, delivered at the right time, for the right use.
But despite the commonality of it’s use it surprising to see that many businesses have issues with it and its value in many organizations is greatly diminished. In fact, too many organizations see the KPI as a one-way street. In fact, in combination with the supplier (i.e. a closed loop system), it can be an invaluable aid in continuous improvement (on both sides!!).
In this article, we take a look at 5 reasons why your DSA metric may not be working for you.
1/ Inaccurate data
You get out what you put in! If your data is incorrect then your measure will be useless. Up front effort in establishing a robust and accurate data set that can be used for the measurement should be your first port of call when establishing the metric.
2/ Target dates are unachievable by the supplier
It’s no good placing an unachievable date on your supplier just because you need it then. If you know it takes 6 weeks to manufacture but your delivery date is a week away then it’s not going to work. Be both reasonable and realistic, set targets that can be achieved (even if they are racy).
3/ Metric doesn’t account for Goods in processing time
I’ve seen this many times when a pallet of goods is sat outside a company’s goods in for a few weeks due to a backlog. It’s processed late and the supplier is then penalized. Your DSA metric needs to consider all the elements of the process and capture data at appropriate times.
4/ Metric doesn’t account for Quality of goods
Remember that DSA is not the only metric for suppliers. They can deliver 100% on time but due to Quality or other issues can still be a poor supplier. High DSA doesn’t necessarily make the supplier brilliant!
5/ Metric doesn’t fit into established goals
Great you have a metric, but what does that mean? Where does it fit into your strategy and departmental goals? Having a metric without an idea of how to use it is not giving it the attention it deserves! Consider how you’ll report it, what gets done afterward (i.e. follow-ups with the supplier (you do share their DSA with them right?), remember that producing the metric is just the start of the process.
6/ Measure takes ages to produce and by the time it is its History.
If your report isn’t timely then it might be useless. Looking at your performance from 6 months ago isn’t going to help much (unless you’re looking at trends) Establishing systems and processes that look at timely KPI’s should be a must.
So these are our 6 thoughts on why your DSA KPI may not be working for you. Have your own thoughts? Let us know in the comments section below.