Measuring the success of your fulfillment operations allows managers to see and assess problem areas in a timely manner. Maintaining a set of Key Performance Indicators (KPI’s) permits a company to ensure that they are meeting the expectations of their customers while balancing an appropriate level of speed and efficiency. Once the set of KPI’s has been determined, managers need to review the data representing these measurements on a regular basis in a way that enables them to make decisions quickly when service levels fall or to plan ahead in times of peak sales. Successful fulfillment providers should be more than willing to provide examples of KPI’s that they frequently monitor to portray efficiency.
Upholding a handful of measurements affords a company and its managers the ability to take action in order to maintain the success of their operations by proactively anticipating outcomes as well as challenging problem areas based on performance. Our recommendation for four essential KPI's are:
- Active Product Storage: Determining obsolete products utilizing storage space can help managers evaluate the need for a change in layout or the size of storage requirements. Warehouses are not always optimized when operating at maximum capacity. Maintaining a certain level of available space allows managers to quickly respond to changes in demand.
- Order Fill Rate: Measuring the number of orders that can be filled depending on the inventory on hand helps to forecast the amount of sales that can be met. This measurement is very much an indicator of customer satisfaction. Maintaining a higher fill rate means that there is a better ability to meet sales requests by properly balancing inventory.
- Shipment Timeliness: An on time delivery is one that reaches the end user on schedule. In today’s age of e-commerce sales this metric is growing more important by the day. Customers expect to receive their products when they are told, so ensuring on time delivery is essential to customer satisfaction. Even B2B orders are essential to maintain shipment timeliness since end products may rely on the arrival of an order on time.
- Order Accuracy: Order accuracy measures several factors: delivery to the proper address, on-time delivery, and appropriate product condition. Customers always expect their orders to be perfect, therefore poor performance in one phase of an order can affect an otherwise positive experience. Monitoring each of the factors contributing to the order accuracy measurement is important to determine the problematic areas in the process and taking quick action may be the differentiator in a positive vs. negative customer experience.
Amware guarantees performance using mutually agreed upon KPI’s for our clients. We stand by the metrics we promise and won’t cloud the data that represents your important operational objectives. If you’re having trouble navigating and measuring your fulfillment operations, feel free to contact us.
For more information on this topic, check out our detailed article on warehouse KPIs or click below to download our eBook on essential fulfillment KPI's.
