Section: Fundamentals of Supply Chain Management

* On-Time Delivery Performance: A high level of on-time delivery performance indicates that the company has effectively managed its inventory to meet customer demand consistently.
* Reducing Inventory Levels: Significantly reducing inventory levels can initially disrupt the company' s ability to meet delivery schedules, as there is less buffer stock available to accommodate variations in demand or supply chain disruptions.
* Short-Term Impact: In the short term, the reduction in inventory is likely to lead to a decline in on- time delivery performance as the company adjusts to the new inventory levels and attempts to optimize its supply chain processes.
* Long-Term Stabilization: Over time, the company may stabilize at a lower level of on-time delivery performance if it successfully implements measures to improve efficiency and accuracy in demand forecasting, production planning, and supplier coordination. However, achieving the previous high level of performance with lower inventory levels is challenging.
References:
Christopher, M. (2016). Logistics & Supply Chain Management. Pearson UK.
Silver, E. A., Pyke, D. F., & Thomas, D. J. (2016). Inventory and Production Management in Supply Chains.
CRC Press.

To decrease shipping costs, a shipper should increase the weight shipped and consolidate shipments.
Consolidating shipments reduces the cost per unit weight by maximizing the use of transportation capacity, thereby achieving economies of scale. Utilizing less-than-truckload (LTL) shipments, using a common carrier instead of a contract carrier, or decreasing the weight shipped and using break-bulk shipments typically result in higher costs due to inefficiencies and lower volume discounts.
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). "Supply Chain Management: A Logistics Perspective."