Purpose of the lesson
Measure actual customer-order performance against the approved plan, identify backorders and causes of non-delivery, and create a revised order schedule.
Practical outcome
By the end of this lesson, you must be able to:
- Compare planned and actual order patterns.
- Measure performance across quality, quantity, time, place and cost.
- Calculate and monitor customer back orders.
- Identify the root causes of non-delivery.
- Determine the effect on customers and operations.
- Prepare a revised customer-order schedule.
- Report and monitor corrective actions.
1. Gather the required information
Obtain:
- Planned customer-order schedule
- Actual customer orders
- Sales and order history
- Customer-priority list
- Delivery schedule
- Proof-of-delivery records
- Stock and allocation reports
- Back-order register
- Customer complaints
- Return and rejection records
- Transport exception reports
- Production and supplier status
- Order-processing costs
- Relevant service criteria
Use data from the same reporting period.
2. Prepare the planned-versus-actual order record
Compare the plan with actual customer demand.
| Customer | SKU | Planned quantity | Actual quantity | Planned date | Actual order date | Variance |
|---|---|---|---|---|---|---|
| Customer A | SKU-01 | 500 | 650 | 5 July | 5 July | +150 |
| Customer B | SKU-02 | 400 | 300 | 6 July | 6 July | −100 |
Calculate:
Order quantity variance = Actual order quantity − Planned quantity
A positive variance indicates demand above plan. A negative variance indicates demand below plan.
3. Measure the actual order pattern
Analyse orders by:
- Customer
- SKU
- Day, week or month
- Quantity
- Order frequency
- Delivery location
- Requested lead time
- Priority
- Seasonal or promotional period
Look for patterns such as:
- Repeated demand above forecast
- Declining demand
- Unplanned urgent orders
- Changes in product mix
- Orders concentrated on particular days
- Increasing order cancellations
- Demand shifting between locations
Order-pattern report
| Measure | Planned | Actual | Variance | Trend |
|---|---|---|---|---|
| Orders received | 100 | 115 | +15 | Increasing |
| Units ordered | 5,000 | 5,600 | +600 | Above plan |
| Urgent orders | 5 | 18 | +13 | Unfavourable |
| Cancelled orders | 2 | 7 | +5 | Unfavourable |
4. Measure quality performance
Evaluate whether orders were fulfilled according to the correct:
- SKU
- Specification
- Condition
- Packaging
- Documentation
- Customer requirement
Use:
Order accuracy = Correct orders delivered ÷ Total orders delivered × 100
If 94 of 100 delivered orders were correct:
Order accuracy = 94 ÷ 100 × 100 = 94%
Record incorrect, damaged or rejected deliveries.
5. Measure quantity performance
Check whether each order was delivered in full.
Use:
Order-fill rate = Quantity delivered ÷ Quantity ordered × 100
If the customer ordered 500 units and received 450:
Order-fill rate = 450 ÷ 500 × 100 = 90%
Also calculate:
In-full order rate = Orders delivered in full ÷ Total delivered orders × 100
6. Measure time performance
Compare:
- Requested delivery date
- Confirmed delivery date
- Dispatch date
- Actual delivery date
- Customer receiving window
- Order cycle time
Use:
On-time delivery rate = Orders delivered on time ÷ Total orders delivered × 100
Measure order cycle time from receipt of the customer order to final delivery.
7. Measure place performance
Confirm whether delivery occurred at:
- The correct customer
- The correct branch or site
- The correct receiving point
- The authorised delivery address
Use:
Correct-place delivery rate = Orders delivered to the correct location ÷ Total deliveries × 100
Record incorrect-location deliveries even if the goods were later redirected successfully.
8. Measure cost performance
Compare actual fulfilment costs with planned or standard costs.
Include:
- Picking and packing
- Transport
- Overtime
- Additional trips
- Expedited delivery
- Returns and redelivery
- Customer credits
- Emergency procurement
Use:
Cost variance = Planned fulfilment cost − Actual fulfilment cost
A negative result indicates that actual cost exceeded the plan.
Performance scorecard
| Dimension | Measure | Target | Actual | Variance | Status |
|---|---|---|---|---|---|
| Quality | Order accuracy | 98% | 94% | −4% | Below target |
| Quantity | Order-fill rate | 97% | 90% | −7% | Below target |
| Time | On-time delivery | 95% | 92% | −3% | Below target |
| Place | Correct-location delivery | 100% | 99% | −1% | Below target |
| Cost | Cost per order | R500 | R560 | R60 over | Below target |
9. Determine the number of back orders
A back order is an outstanding customer quantity that could not be supplied on the original committed date.
Calculate:
Back-order quantity = Quantity ordered − Quantity supplied
Example:
- Quantity ordered: 500 units
- Quantity supplied: 350 units
Back-order quantity = 500 − 350 = 150 units
Calculate the number of affected orders separately from the total outstanding units.
Back-order register
| Customer | Order | SKU | Ordered | Delivered | Back order | Original date | Expected date |
|---|---|---|---|---|---|---|---|
| Customer A | ORD-101 | SKU-01 | 500 | 350 | 150 | 10 July | 13 July |
Update each back order until it is delivered, cancelled or resolved through an approved alternative.
10. Identify non-delivery cases
Classify non-delivery as:
- Complete non-delivery
- Partial delivery
- Late delivery
- Incorrect delivery
- Rejected delivery
- Delivery to the wrong location
- Failed delivery attempt
Record the relevant customer, order, quantity, planned date, actual result and available evidence.
11. Determine root causes
Investigate causes in the following areas:
| Area | Possible cause |
|---|---|
| Customer order | Incomplete or incorrect information |
| Inventory | Stock shortage or inaccurate record |
| Procurement | Supplier delay or short delivery |
| Production | Capacity shortage, downtime or quality failure |
| Warehouse | Picking error or late loading |
| Transport | Vehicle breakdown, capacity shortage or route delay |
| Customer | Site closed or delivery refused |
| System | Order not released or incorrect data |
| External environment | Road closure, severe weather or infrastructure disruption |
Apply a method such as the Five Whys and distinguish the immediate cause from the underlying cause.
12. Create a root-cause register
| Non-delivery | Immediate cause | Root cause | Responsible area | Corrective action |
|---|---|---|---|---|
| ORD-101 partially delivered | Stock unavailable | Supplier order placed late | Procurement | Revise reorder control |
| ORD-102 delivered late | Vehicle departed late | Picking completed after cut-off | Warehouse | Realign picking schedule |
Avoid assigning responsibility before validating the evidence.
13. Determine the operational and customer effect
Assess the effect on:
- Customer service
- Customer production or operations
- Sales and revenue
- Inventory
- Warehouse workload
- Transport cost
- Supplier requirements
- Returns and redelivery
- Contractual commitments
- Reputation
Prioritise issues affecting critical customers, essential products or repeated failures.
14. Develop corrective actions
Possible corrective actions include:
- Expedite stock replenishment.
- Reallocate available inventory.
- Create and prioritise a back order.
- Arrange an approved substitute.
- Increase authorised production.
- Revise the picking sequence.
- Reallocate vehicle capacity.
- Correct customer master data.
- Improve order-validation controls.
- Change reorder levels.
- Implement supplier corrective action.
- Strengthen exception alerts.
Assign each action to a responsible person with a completion date.
15. Prepare the revised order schedule
Include:
| Customer | Order | SKU | Outstanding quantity | Priority | Stock availability | Revised dispatch | Revised delivery |
|---|---|---|---|---|---|---|---|
| Customer A | ORD-101 | SKU-01 | 150 | 1 | 12 July | 12 July | 13 July |
Check the revised schedule against:
- Available-to-promise stock
- Replenishment dates
- Production capacity
- Picking capacity
- Vehicle availability
- Customer delivery windows
- Customer priorities
Do not promise a revised delivery date until operational feasibility has been confirmed.
16. Communicate the revised commitment
Inform:
- Customer or end user
- Customer service
- Sales
- Inventory control
- Procurement
- Production
- Warehouse
- Transport
State:
- Original commitment
- Reason for non-delivery
- Quantity already supplied
- Outstanding quantity
- Proposed corrective action
- Revised delivery date
- Contact and escalation details
Obtain and retain customer confirmation where required.
17. Monitor the revised schedule
Track:
- Back-order stock allocation
- Supplier receipts
- Production completion
- Picking and dispatch
- Transport progress
- Proof of delivery
- Customer acceptance
- Outstanding quantities
Close the back order only after verifying the agreed resolution.
18. Prepare the performance report
Report:
- Planned and actual order patterns
- Quality, quantity, time, place and cost results
- Number and value of back orders
- Non-delivery cases
- Root causes
- Corrective actions
- Revised commitments
- Recurring trends
- Recommended improvements
Use tables and graphs where they make performance trends clearer.
Practical task
You are provided with performance reports, customer-order schedules and agreed performance criteria.
Complete the following:
- Compare actual and planned order patterns.
- Calculate order variances.
- Measure performance across quality, quantity, time, place and cost.
- Determine the number and quantity of back orders.
- Identify non-delivery cases.
- Conduct root-cause analysis.
- Determine the effect on customers and operations.
- Develop corrective actions.
- Prepare a revised customer-order schedule.
- Compile and submit an order-performance report.
Required evidence
Include the following in your Portfolio of Evidence:
- Planned customer-order schedule
- Actual customer-order information
- Planned-versus-actual comparison
- Order-pattern analysis
- Performance calculations and scorecard
- Back-order register
- Non-delivery register
- Root-cause analysis
- Corrective-action record
- Revised customer-order schedule
- Customer and internal communications
- Order-performance report
- Evidence of review or approval
- Completed observation checklist
- Learner declaration of authenticity
Competence checklist
| Assessment criterion | Competent | Not yet competent | Comments |
|---|---|---|---|
| Measure actual order patterns against planned patterns | |||
| Calculate and interpret order variances | |||
| Measure performance against quality criteria | |||
| Measure performance against quantity criteria | |||
| Measure performance against time criteria | |||
| Measure performance against place criteria | |||
| Measure performance against cost criteria | |||
| Determine the number and quantity of back orders | |||
| Identify non-delivery cases accurately | |||
| Determine the root causes of non-delivery | |||
| Develop appropriate corrective actions | |||
| Create a feasible revised order schedule | |||
| Prepare a comprehensive performance report | |||
| Submit complete supporting evidence |
Lesson Summary
To monitor customer-order performance, compare actual orders and fulfilment results with the approved plan. Measure compliance across quality, quantity, time, place and cost, and calculate the number and quantity of back orders. Investigate non-delivery cases to identify their root causes and operational effects. Develop corrective actions and prepare a revised order schedule based on confirmed stock, production, warehouse and transport capacity. Communicate the revised commitment and monitor each outstanding order until completion.