The delivery schedule is an agreement between buyer and seller as to when and how often merchandise will be delivered. It is a plan that outlines the specifics of future delivery periods. This can be a mutually determined schedule or one that is dictated by the buyer. It is often drafted with some flexibility in terms, though there are also often strong parameters as to delivery times and volume which are meant to protect both the buyer and the seller.
In order to ensure that it continues to fit the demands of the market, a delivery schedule will usually need to be reviewed periodically. In most cases, the buyer will dictate changes. The most common reason for a schedule change is that the buyer needs more or fewer deliveries of the product or service. In some cases that change may be so dramatic that the seller will no longer be able to fulfill the requirements of the buyer. This could either result in the buyer finding a new seller or supplementing the current vendor with a new supplier.
Often, the delivery schedule will account for some change in the buyer’s needs. This includes allowance for a limited higher or lower amount of product delivery and some schedule changes. In most cases the seller is guaranteed that a certain amount of product will be ordered. There may be a clause which grants the seller a cancellation fee if the buyer does not require the contracted amount of product. This fee may also apply when requested delivery of product is delayed.
The delivery schedule may be subject to periodic analysis via a metric known as delivery schedule adherence. This process involves determining whether deliveries are timely and in accordance with schedule frequency. A formula is used to determine what percentage of deliveries has been made in accordance with the schedule. Many companies will perform this analysis for each supplier and then rank them.
Adherence to a delivery schedule enables the buyer to maintain business as usual. If the seller does not comply with the schedule it can have a negative effect on productivity, customer relations and inventory levels. Poor adherence to the schedule can deplete supplies or cause overstock that increases the buyer’s maintenance and storage costs. Depending on the product, it could also result in waste due to expiration or force the buyer to drop prices in order to move stock.