# Depth of delay calculation

Delay depth measures the average delay in production, providing essential insights into work-in-progress management. This KPI is crucial for optimizing supply chain efficiency and identifying production bottlenecks. Effective monitoring of delay depth can significantly improve overall production performance.

## Description

### Definition of Delay Depth

Delay depth is a key performance tracking indicator for a site or production workshop. This indicator is essential for identifying symptoms of poor management of work-in-progress. Calculated based on delivered lines, it provides the sum of days of delay divided by the number of lines delivered, thus offering a measure of the average delay, also called delay depth. It is important to note that delay depth should not be confused with the use of production capacity, which measures the percentage of production capacity used by the company.

### Importance in Industrial Performance Management

In industry, delay depth measures the gap between a company’s actual production and the maximum theoretical production it could achieve using all its equipment optimally. It is often used to assess a company’s production efficiency and identify bottlenecks that limit its ability to increase production. Delay depth plays a crucial role in measuring the service rate, adding a qualitative dimension to this assessment. Monitoring this indicator is vital as it provides a global vision of possible deviations from a supplier and allows for the implementation of a classification based on their reliability. This monitoring is particularly relevant for supply managers, directly influencing the supply chain, sales, and billing.

### How to Calculate Delay Depth

There are several ways to calculate delay depth, but the most commonly used method is calculating delay depth as a percentage. To do this, start by determining the company’s maximum theoretical production using the following formula:

Maximum Theoretical Production = Available Work Time x Theoretical Production Rate

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

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

Delay Depth Percentage = (Maximum Theoretical Production – Actual Production) / Maximum Theoretical Production x 100

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

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

Delay Depth in Hours = Available Work Time – Actual Production Time

Delay Depth in Production Units = Maximum Theoretical Production – Actual Production

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

### Graphical Method of Monitoring

To track and monitor the evolution of delay depth, a graphical method can be used. This method involves generating a point graph based on the columns of delivery dates and tracking the evolution month by month. However, it is important to note that this indicator can be affected by extreme values, sometimes making it more useful to discuss variance 50/80/05 on the delay seen by the client.

### Delay Depth Indicator (IPR)

The delay depth indicator (IPR) is a performance indicator used in production management to measure the level of delay in the production workshop relative to the planned state of the workshop. It allows tracking the evolution of the workshop’s delay over time and implementing actions to reduce this delay.

To calculate the IPR, you must first determine the planned level of the workshop based on production objectives and the production schedule. You must also determine the current level of the workshop based on actual production.

The IPR is then calculated as follows:

IPR = (Current Workshop Level – Planned Workshop Level) / Planned Workshop Level

For example, if the planned workshop level is 100 units and the current workshop level is 90 units, the IPR would be (90 – 100) / 100 = -10%. This means that the workshop is 10% behind the planned level.

It is important to note that the IPR can be positive or negative. A positive IPR indicates that the workshop is ahead of the planned level, while a negative IPR indicates a delay. The IPR can be used to track the evolution of the workshop’s delay over time and implement actions to reduce this delay.

### Discover our training on delay depth

To deepen the understanding and management of delay depth, training is available. These resources are designed to help professionals reduce delay depth and improve production efficiency. https://www.perfodata.com/fr/formation/diminution-de-la-profondeur-de-retard/

### Discover Our Training on Delay Depth

To deepen the understanding and management of delay depth, training is available. These resources are designed to help professionals reduce delay depth and improve production efficiency. For more information on reducing delay depth and available training, you can visit Perfodata.

### Alternative Calculations of Delay Depth

In addition to percentage, delay depth can also be calculated in hours or production units, allowing for a more concrete assessment of its impact on production costs and the necessary actions to improve efficiency.

### HOW TO MEASURE THE IMPACT OF DELAYS IN PRODUCTION: INDICATORS TO FOLLOW

Here are some indicators to keep in mind for tracking delay management:

• Delay Depth: This is the number of days of delay of the oldest order. This measure is often used to set up order processing strategies based on the “first in, first out” (FIFO) principle.
• OTD (On-Time Delivery): This indicator measures the on-time delivery rate of orders. It corresponds to the percentage of orders delivered on or before their scheduled delivery date. OTD is a key indicator of customer service quality and measures the efficiency of delay management.
• Lead time: This is the average time needed to deliver an order from the order date to the delivery date. This measure helps determine the time needed to process an order and deliver the product to the customer. Lead time is an important element in setting delivery times and planning production.
• Nb of late orders: This allows tracking the evolution of the number of delays over time and measuring the impact of corrective actions implemented.
• Nb of late parts: This allows tracking the evolution of the number of late parts over time and measuring the impact of corrective actions implemented.
• Nb of priority customer orders in arrears: This allows measuring the impact of delays on the most important customers and prioritizing corrective actions accordingly.

### Other terms

• Production performance
• Service rate
• Delivery tracking
• Supply chain efficiency
• Key performance indicators (KPI)
• Inventory management
• Production planning
• Production capacity
• Bottlenecks
• Process Optimization
• Delay variance
• Quality control
• Supplier management
• Supplier reliability
• Performance measurement
• Delay analysis
• Delivery Performance Indicator (IPDL)
• Continuous improvement
• Supply management