Every hour counts in eCommerce orders, making it essential to leverage order fulfillment metrics to streamline the fulfillment process. Order fulfillment service providers typically leverage a broad range of technologies that allow them to gather various data. Analyzing this data allows a fulfillment partner to identify problems and trends that may impact cost-effectiveness and operational efficiency.
Which Order Fulfillment Metrics are Considered Advanced?
Partnering with a third-party logistics (3PL) provider that can develop and monitor various metrics allows online sellers to optimize spending and improve the customer experience through better service. However, not all fulfillment providers have the same data collection or analysis capabilities.
Some 3PLs collect various data but don’t have the means to analyze and apply it to improvements. Others may not have progressed far enough along the digital transformation process to collect that necessary data at all. To get the most out of your fulfillment relationship, work with a logistics partner that uses the following advanced order fulfillment metrics to facilitate continuous improvement.
Order Management Metrics
- Revenue per order. Average order revenue offers an informed view into profit margins, enabling online sellers to understand how specific fulfillment activities impact profitability.
- Order line count. Identifying an average number of lines per order allows a fulfillment operation to adjust pick-and-pack practices to the unique needs of each eCommerce seller.
- Pick lines per order. Selecting the correct picking method depends heavily on the number of pick lines on each order. For example, a pick-and-pass method is inefficient for an operation where most orders have dozens of pick lines, whereas a wave picking strategy works poorly when orders have few lines.
- Labor hours. Most fulfillment operations track labor hours, but more advanced facilities break down work activity into direct and indirect hours. Knowing exactly how warehouse associates spend their time enables managers to properly allocate labor, minimize overtime expenses, and appropriately bill customers.
- Orders per hour. The number of orders a fulfillment operation can process per hour determines the labor required for each shift and facilitates benchmarking against industry standards.
- Pick lines per hour. Measuring how many lines each picker can handle per hour lets fulfillment managers benchmark the performance of warehouse associates against established productivity standards.
- Average lines per order. If each order has only one or two lines, shipping and fulfillment costs may eat away at profitability. Retailers use this metric to identify opportunities to entice customers to purchase more items per order.
- Average picks per order. If too many orders require multiple pickers across several picking locations, this practice will dramatically impact fulfillment efficiency.
Space/Inventory Management
- Cycle count/inventory accuracy. A cycle count verifies the accuracy of physical inventory in storage against existing inventory records. If cycle counts identify regular inconsistencies, then the fulfillment operation must adjust inventory management practices.
- Stock time. Sometimes called “dock-to-stock,” stock time refers to the time it takes to receive supplier shipments at the loading dock and put them away in the warehouse. Taking too long to put stock away may result in unnecessary stockouts.
- Space management. Warehouse managers may optimize inventory placement and procurement activities by monitoring open pallet positions and storage utilization rates.
Customer Service
- On-time shipping. A poor on-time delivery metric signifies that the fulfillment operation needs to make immediate corrections to avoid damaging customer relationships.
- Order accuracy. Inaccuracies in picking and packing create inconveniences for customers that may damage the retail brand and deter repeat sales. Therefore, fulfillment operations should monitor this metric closely in the pursuit of perfect order fulfillment.
Practical Applications for Order Fulfillment Metrics
Gathering data does little good if nobody uses it. Advanced order fulfillment metrics help a 3PL determine whether it should source new technology solutions or change processes and practices to address ongoing warehouse issues. For example, data trends may show that the average box size has increased over time, that inbound or outbound shipment volumes are higher on certain days of the month, that labor needs change based on specific days of the week, and much more.
Putting data into dashboards for daily review allows fulfillment operations to constantly re-engineer solutions to improve efficiency. Establishing a comprehensive set of order fulfillment metrics allows a fulfillment provider to take trends and place them within continuous improvement projects and Gemba Walk cycles that eliminate wasted time, distance, and travel redundancies within the fulfillment center. For example, warehouse managers may flex shift labor based on volume forecasting or move popular products closer to picking stations to shorten travel times. A data-driven fulfillment 3PL constantly incorporates such changes to optimize efficiency and profitability.
Data-Driven Order Fulfillment From Amware Fulfillment
While many 3PLs choose to share data weekly, monthly, or even quarterly, Amware Fulfillment shares critical key performance indicators and core metrics with our customers every day. To see how advanced daily order fulfillment metrics from Amware Fulfillment will improve your eCommerce order fulfillment operation, please reach out to us today.
