Improve eCommerce Order Fulfillment with These 3 Easy Metrics
Within the past 5 years, almost every major consumer market has gone through a technological revolution wherein consumer preferences have shifted and become more aggressive.
A more educated consumer has emerged from the world of ecommerce. They know how to conduct their own product research; they have access to online reviews and social media, both of which inform their buying process; and they’ve come to trust salesmen less and their own instincts more. They know exactly the product that they want. This means that salesmen are no longer the gatekeepers of information, and that makes the job of upselling more difficult.
Moreover, ecommerce has changed the ways that people make purchases. It has impacted their buying behaviors to such an extent that most buyers want their packages with next-day or two-day delivery (or they at least want that option). If an order is going to take weeks to get to a customer, they’ll find someone who can deliver it to them faster.
Free Guide: Top Order Fulfillment KPI Indicators
From a supplier standpoint, this puts the entire supply chain under intense scrutiny. Supply chains today can’t just ensure that shipments and deliveries of orders are complete; they must also meet shorter and shorter delivery windows and ensure on-time delivery each time. This increased service level can put strain on any operation, especially when the customer is unable or unwilling to absorb the cost of increased service.
But there often isn’t an alternative: In many cases, an extra day of order processing or shipping time can mean lost customers, and that means lost revenue.
This is not new information to anyone who works in supply chain management, but with the proliferation of mobile sites and now shopping apps, this phenomenon is becoming more and more pronounced, all of which raises an important question: What can suppliers do to keep up with these new demand constraints?
Accurate and complete data analysis is the best and easiest answer to this problem, even if it is not the most obvious or glamorous.
Data Analytics and Your Order Fulfillment Operation
Data analytics is one of the most important tools in modern order fulfillment because, when it comes to order fulfillment, you can’t improve what you don’t measure.
Some simple measures that most operations collect are: Order data, product size, quantity shipped, and inventory on hand. Although helpful, this information paints the picture of shipping optimization with very broad brush strokes, making it difficult to see the operation at the granular level often required for true improvement.
To get a better sense of how your operation is performing, and therefore how it can improve, you need to fill in the gaps with the smaller brushstrokes. Below, we explore three important KPIs that you should be measuring and analyzing in order to fill in the gaps of your data analysis.
The Three Most Important Ecommerce Metrics that can Help You Grow and Retain Business:
- On-Time Shipments: This number is used to measure whether or not orders shipped at their planned time. It is frequently displayed as a percentage of total orders, and is a critical measurement to assess whether or not your shipping processes are as efficient as they could be. This metric also plays a key role in customer satisfaction.
- Warehouse Capacity: This number keeps track of the amount of warehouse space used within specific peak and average periods, and is crucial in recognizing and optimizing your slotting process for faster and slower moving items.
- Order Picking Accuracy: This number can be used to see how productively labor is being used—and how accurate employees/systems are. By tracking this as a percentage, patterns can be more easily recognized so that you can properly address peaks and valleys in order demand efficiently, without excessive error correction and lower returns.
The Bottom Line
If you want to succeed in today’s world of eCommerce, then you’ve got to make sure you are measuring KPIs that are critical to your business. By measuring the three above, you can begin to make meaningful improvements that can help make your operation more successful and profitable, and that means a fatter bottom line.
Like Al Pacino said in Any Given Sunday, “Life is a game of inches.” We better get out our rulers. 
