How to Measure Order Fulfillment Success (2024)

FAQs

How do you measure order fulfillment? ›

The company uses its specific performance metrics in the perfect order fulfillment formula to discover its order fulfillment standard:Perfect order fulfillment = (on-time delivery performance metric x accuracy performance metric x correct customers performance metric) x 100Perfect order fulfillment = 95% x 99% x 99% x ...

Put simply, the perfect order metric is a measure of whether or not your current workflows are meeting customer expectations. Companies that boast some of the highest perfect order rates carry less inventory, experience shorter cash-to-cash cycle times, and have significantly fewer stockouts than their competitors.

Many companies track key performance indicators (KPIs) to gauge their performance in order fulfillment (and other business areas) over time. In this guide, we will discuss the five most important ecommerce fulfillment KPIs that your business should be tracking, and explain how a 3PL can help you improve in those areas.

Order processing KPIs are performance metrics that measure the efficiency and effectiveness of the order processing system.

Order Fill Rate is calculated by dividing the orders delivered on the first attempt by the total orders shipped, and then multiplying the resulting number by 100. This order management performance metric helps you track the percentage of successfully delivered orders on the first attempt.

You can calculate fill rate by counting the number of orders that you were able to fulfill at one time. Then divide the number by the total number of orders you received and multiply the sum by 100.

The formula is as easy as J + H = F. EnJOYment of the present moment + Happiness as a byproduct of our actions = Fulfillment!

A good fill rate percentage is as close to 100% as possible.

The average company's fill rate is between 85-95%, which means some products may be out of stock, or there was more demand than anticipated. Striving for a 97-99% fill rate should be among the goals of any warehousing team.

What is the formula for fulfillment rate? ›

Fill Rate = (Orders Shipped / Total Orders Placed) x 100

For example, let's say you shipped 225 orders for the previous month, but you determined that 260 orders were actually placed. Using the fill rate formula, you'd have a fill rate of almost 87% for the month.

Order accuracy is the percentage of your orders that are fulfilled and shipped without errors. A high order accuracy rate means that your customers almost always receive the exact items they order in the proper condition.

For better order handling, evaluate fulfillment metrics. These metrics, which include Cost per Order, Fulfillment Accuracy Rate, Inventory Turnover, Inventory Accuracy, and Rate of Return, determine how well we're doing at getting orders to customers efficiently and correctly.

An efficient order fulfillment process is essential to keep pace with today's supply chain and logistics climate. At its core, to improve order fulfillment efficiency is to simultaneously streamline operations, reduce the time from order receipt to delivery, and improve customer satisfaction and loyalty.

Fulfillment Cost Calculator

Total warehouse cost divided by total order lines. Total warehouse cost divided by annual boxes shipped (to determine total cost per box instead of per order) Total warehouse cost divided by annual net sales in dollars multiplied by 100 (to determine cost as a percentage of net sales)

Fill Rate = (Orders Shipped / Total Orders Placed) x 100

For example, let's say you shipped 225 orders for the previous month, but you determined that 260 orders were actually placed. Using the fill rate formula, you'd have a fill rate of almost 87% for the month.

To calculate the order fulfillment rate, divide the number of "delivered" orders in the previous 90 days by the total number of orders and then multiply by 100%. Expressed mathematically, it is: Order Fulfillment rate (%) = (Number of orders fulfilled / Total number of orders received) x 100.