# Depth of delay calculation

## Description

### How to calculate depth of delay ?

Depth of delay is one of the key control indicators in improving manufacturing performance. A component that plays an important role in the key measure of service level. Depth of delay adds a qualitative dimension. It is directly linked with On-Time delivery performance. The lower is depth of delay, the better is the performance. large depth of delay is causing major logistic disruption within the supply chain.

Depth of delay within industrial sites refers to the gap between an organization’s actual production and the theoretical maximum production it could achieve by using all of its equipment optimally. It is often used to evaluate the efficiency of an organization’s production and to identify bottlenecks that limit its ability to increase production.

There are several ways to calculate depth of delay, but the most common method is to calculate it as a percentage. To do this, the first step is to determine the organization’s theoretical maximum production using the following formula:

Theoretical maximum production = Available work time x Theoretical production rate

The available work time is the number of hours available for production, while the theoretical production rate is the maximum production rate that the organization can achieve by using all of its equipment optimally.

Once the theoretical maximum production has been determined, the depth of delay can be calculated as a percentage using the following formula:

Depth of delay as a percentage = (Theoretical maximum production – Actual production) / Theoretical maximum production x 100

The depth of delay as a percentage gives an idea of the gap between actual production and theoretical maximum production as a percentage. The higher the depth of delay, the further the organization is from its theoretical maximum production and the more potential there is to improve production efficiency.

There are also other ways to calculate depth of delay, such as calculating it in hours or units of production. To do this, the following formulas can be used:

Depth of delay in hours = Available work time – Actual production time

Depth of delay in units of production = Theoretical maximum production – Actual production

These two methods measure depth of delay in concrete terms, rather than as a percentage. They are particularly useful for evaluating the impact of depth of delay on production costs and for determining actions to take to improve production efficiency.

It is important to note that depth of delay should not be confused with utilization of production capacity, which measures the percentage of the organization’s production capacity being used. Depth of delay measures the gap between actual production and the organization’s maximum potential production, while utilization of production capacity measures the proportion of that maximum potential being used.

### What is the formula of depth of delay ?

First formula is to take maximum of delay of late deliveries. It is mostly calculated in days. Second way is to take the average of delays trougout all late deliveries. Most advance calculation provide three values of depth of delay : standard deviation at 50%, 80% and 95%.

Calculation and follow-up of depth of delay is reducing risks within supply chain and logistic schems. It is a key control indicator that help manufacturing and logistics flows.

We obtain the depth of delay also called the average delay by dividing the sum of the days of delay (difference between the delivery date agreed with the supplier and the receipt of the goods) recorded for total orders placed by the number of such orders over a given period.

### How to mesure delay time ?

it is one of the most important daily metric. It can be reduced easilly by working on late deliveries. It is a production and logistic KPI.

It is more than essential to monitor the evolution of this indicator because it gives a global view of all possible deviations of a supplier and to set up a classification according to their reliability. Thus be able to see and quantify the evolution of the average delay and subsequently relativize if the depth of delay is less.

### What is the formulat of calculating delay ?

The importance of this component of the service level is reflected in decision-making for a procurement authority, for example. Indeed, improving this indicator has an immediate impact in the supply chain, sales and invoicing. It is therefore crucial to have this indicator in a company.

### Other terms

Depth of delay on Industrial Data Performance

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