5 Supply Chain Metrics for eCommerce Brands
Supply chain metrics measure your brand’s ability to deliver a high-quality customer experience. Why is that important? Because even small glitches in your eCommerce company’s multi-channel supply chain have the potential to become order errors, shipping delays and other events that negatively impact relationships with customers.
To forge deeper relationships with customers, your brand needs to track and monitor key metrics related to supply chain performance. But which metrics should you track? And what can you do to improve performance when those metrics uncover vulnerabilities?
Supply Chain Metrics for eCommerce Improvement
Whether you’re measuring supply chain performance or some other aspect of your operation, metrics and KPIs should always be tailored to monitor your organization’s unique goals and priorities. But in general, there are a handful of supply chain metrics that are useful for most brands in today’s multi-channel marketplace.
- Perfect Order Index – A Perfect Order Index is a useful way to measure supply chain performance because it gauges multiple criteria. It’s a composite score that measures various aspects of a “perfect order,” including the percentage of orders that are shipped on-time, shipped complete, shipped damage-free and documented correctly.
- Perfect Order Fulfillment – Another useful gauge of performance is Perfect Order Fulfillment. This metric measures the percentage of orders that are considered perfect – the right product, delivered to the right customer, in the right place, at the right time, in the right package and with the right paperwork.
- Order Cycle Time – Fast, as-promised delivery is a hallmark of an exceptional customer experience. 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. Calculated by dividing the cost of goods sold by average inventory, Inventory Turnover gauges supply chain efficiency.
Leading eCommerce companies track dozens of supply chain metrics. But for most brands, supply chain improvement isn’t about developing and monitoring an exhaustive catalog of metrics – it’s about tracking the metrics that are most closely aligned with the organization’s strategic goals and desired outcomes.
How to Leverage Supply Chain Metrics for Business Improvement
Selecting and monitoring the right metrics are important steps in creating an exceptional customer experience. But to achieve business improvement, you need to dig deeper, analyze the data and convert supply chain metrics into actionable insights.
At Dotcom Distribution, we specialize in helping eCommerce brands monitor supply chain performance and implement changes that lead to better customer experiences and improved business outcomes. Contact Dotcom Distribution today to learn how we can help your brand turn supply chain metrics into business advantage.