5 eCommerce Fulfilment Metrics CEO’s Should Use To Review Your Operations

In today's digital-led world, phrases such as "data is king" are regularly thrown around.

But as the desire to build data-led cultures expands, there is also the risk of data overload, particularly for CEO’s and brand owners overseeing various business functions.  

So when it comes to evaluating the performance of your eCommerce Fulfilment, how do you decide if things are running smoothly, and what data should you be considering? 

1. Order Accuracy

One of the most important KPIs to monitor regularly is the number of orders picked, packed and shipped correctly as a percentage of all orders. Unfortunately, inaccurate orders will occur within any fulfilment processes; however, minimising this will help safeguard your brand and your profit. On average, a good order accuracy for direct-to-consumer (DTC) brands is 96-98%.

Order accuracy = (total orders fulfilled accurately/ Total orders fulfilled) *100

Declining order accuracy rate is a pivotal sign of a problem within your operations and typically occurs due to training, processes or capacity limitations.

2. Total Order Cycle time

As Amazon continues to transform shipping times, eCommerce consumers’ expectations are also changing. According to a recent study by McKinsey, consumers expect online orders to be delivered the next day. That means for other brands, the pressure is on to meet customer expectations with delivery times.

While many businesses struggle to meet these expectations, brands must deliver on the timescales they promise consumers. Monitoring the total order cycle time will allow brand owners to ensure they continue to deliver the promised customer experience.

Number of days elapsed between all orders placed and when delivered / total number of orders in time frame

Increased time within the order cycle will result from an issue within your in-house fulfilment or with your delivery courier. 

3. Distribution Costs (As A Percentage Of Sales)

As with any operation within your organisation, it’s crucial to monitor costs, and that’s no different for your eCommerce fulfilment operations.

This includes all expenses relating to receiving and storing stock and picking, packaging, and shipping orders.

Distribution costs (as a percentage of sales) = total distribution costs / total sales

Monitoring your total distribution costs over time is a great way to identify an issue if there is a sudden cost spike.

4. Average Warehouse Capacity Used

As your brand grows, your storage needs will also increase, however with many brands affected by seasonality, that usage will likely fluctuate throughout the year.

Unfortunately, this can result in eCommerce fulfilment operations rapidly running out of space when they are faced with consistent growth and seasonality growth.

Average Warehouse capacity used - amount of warehouse floor space used / total warehouse space x100

Monitoring average warehouse capacity usage and predicting future use can provide the foresight to seek alternative solutions.

5. Total Number Of Customer Complaints

While customer complaints are not traditionally associated with operational KPIs, for an eCommerce brand, they are critical and act as a key warning signal that your customers are unhappy with the service. An increase in complaints about orders and delivery is a clear signal of a problem within your eCommerce fulfilment process.

 

How to manage a drop in operational performance?

As brands grow, it’s not uncommon to experience turbulence within their operational performance, particularly as they outgrow their in-house capacity or existing provider. 

However, eCommerce businesses need to react fast to protect their brand and ensure customers continue to buy. For some brands, it may be time to consider next stage fulfilment. 

Download our free Next Stage Fulfilment Whitepaper

Share this post

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on email
Email
Gary Rees

Gary Rees

Gary Rees is the owner of Synergy Retail Support, one of the leading SME fulfilment centres in the UK. Having successfully grown the business for over 30 years and with relationships with most household brands, he now looks to partner with customers rather than just act as a supplier so that both parties can grow together. Gary has extensive knowledge in retail compliance, production technologies, shipping details and customer service.

Feel free to contact me personally if you’d like to discuss your business.

01604 412 290