Overview
Delivery Time is defined as the amount of time between when a customer places an order for a product and when that customer receives the product. It is one of the dimensions of product value provided to the customer that companies try to optimize.
Delivery Time Factors
The following factors are factors that influence the average delivery time.
- Stocked Inventory - whether the inventory is stocked when a product is ordered affects the product's delivery time. However, keeping the inventory stocked represents a trade-off. A company that overstocks their inventory will fact the storage and maintenance costs, as well as possible product obsolescence. Understocking a product will mean longer delivery times.
- Inventory Location - the location of the inventory can reduce delivery time if the location is near to the customer. One way to achieve this is to locate the warehouses nearest to the greatest concentration of customers, or to locate multiple warehouses near customer centers.
- Production Timeline - if the product ordered is not currently in stock, the length of time it takes a company to produce or procure the product will impact delivery time.