Blog Posts 6 Fulfillment KPIs You Need to Measure Right Now
- Ecommerce growth increases the need to measure order fulfillment operations
- Identify key performance indicators (KPIs) that support business goals
- Areas for focus include receiving, put away, inventory management, order processing, shipping and quality
- Achieving optimal performance can spur further growth
Ecommerce sales have reached record levels this year and show no sign of slowing down. With every online order, merchants have the opportunity to deliver a positive experience that makes their customers keep coming back.
Effective order fulfillment plays an instrumental role in providing that customer experience. Merchants need to make sure they’re getting the right product to the right place at the right time. In his latest blog for Multichannel Merchant, Perry Belcastro, Saddle Creek’s senior vice president of fulfillment services, discusses how to establish meaningful key performance indicators (KPIs) to help measure the effectiveness of ecommerce fulfillment operations.
Following is an excerpt …
Establishing the Right KPIs for Ecommerce Fulfillment Operations
KPIs should be strategically aligned with your specific business goals. Start by thinking about what you are trying to achieve. Then, determine what needs to be done every day to make that happen, and how that activity can best be measured.
Every merchant will have different answers to those questions – and, therefore, different methods of measurement. As a rule, however, it is wise to establish order fulfillment KPIs pertaining to the following areas within the warehouse walls.
First, consider how inbound inventory is handled. Are products received into the warehouse in a timely manner? On-time receiving can be determined by calculating the percent of late receipts over the number of closed receipts.
It is also important to measure accuracy. For example, if you ordered 10 blue shirts, did you receive all 10? Discovering discrepancies early on allows you to be proactive in resolving them to avoid problems down the road.
Once products are received, how quickly are they made available for sale? One common way to evaluate this is to look at the percent of items that are put away on shelves or pick faces on time.
To help ensure inventory accuracy, a WMS can be utilized to track SKU picking activity and replenishment and conduct cycle counts on a regular basis (annually, quarterly or even daily) – in addition to doing a full physical inventory. KPI’s for cycle count accuracy usually show the percentage of counts that require no adjustments and, where adjustments apply, how many.
Read the full article to learn about other important KPIs for order fulfillment.