5 Supply Chain Metrics You Should Be Tracking
Even the smallest glitches in your eCommerce company’s supply chain have the potential to become order errors, shipping delays and other negative situations that could impact your relationship with your customers. Monitoring key supply chain metrics gives your brand the insight needed to deliver high-quality experiences consumers expect and keep your business running functionally.
Below are a few supply chain metrics that are useful for most brands in today’s multichannel marketplace. Remember, metrics and KPIs should always be tailored to meet your brand’s unique goals.
- Perfect Order Index – A Perfect Order Index measures your overall supply chain performance. It’s a composite score that includes the multiple aspects of a “perfect order,” including the percentage of orders that are shipped on time, complete, damage-free and correctly documented.
- Perfect Order Fulfillment – This metric measures the percentage of orders that are considered perfect – the right product, delivered to the right customer and in the right place, at the right time. The item must also arrive in the correct packaging and with the proper paperwork.
- Order Cycle Time – Order Cycle Time measures the number of days it takes for the customer to receive items after placing an order. In online commerce, leading brands use this metric to meet consumers’ high expectations about the availability of inventory and fast delivery times.
- Days Supply – Good inventory management enables your organization to avoid excessive inventory levels while ensuring that you have enough inventory to meet demand. Inventory Days Supply improves the inventory management process by measuring the amount of time it will take to deplete existing inventory levels based on forecasted demand.
- Inventory Turnover – The Inventory Turnover rate measures the number of times your company’s inventory turns over or is sold in a given year. This is calculated by dividing the cost of goods sold by average inventory. Inventory Turnover gauges supply chain efficiency.
Supply chain improvement is about tracking the metrics that are most closely aligned with your organization’s goals and desired outcomes.
To truly achieve business improvement, brands need to dig deeper, analyze the data and convert supply chain metrics into actionable insights. By tracking supply chain performance and implementing the appropriate changes, you can create an overall better customer experience and improve business outcomes for your eCommerce brand.
To learn more about how you should be utilizing the correct supply chain metrics to improve your brand’s customer experience, we invite you to contact us here.