As an eCommerce seller, you know that your fulfilment centre is the heart of your operations. It’s the place where your products are stored, picked, packed, and shipped. But how do you know if your fulfilment centre is operating efficiently and effectively? The answer lies in tracking key performance indicators (KPIs). In this blog, we’ll discuss the most important fulfilment centre metrics that you should be tracking.
Key Performance Indicators of Fulfilment Centres
Order Cycle Time
Order cycle time is the duration it takes from when an order is placed to when it is delivered to the customer. This includes the time it takes to pick, pack, and ship the order. A shorter order cycle time means that you’re able to fulfil orders quickly, which leads to happier customers and more repeat business.
This metric includes the percentage of orders that are fulfilled correctly. Correct order fulfilment basically means that the correct items are picked, packed, and shipped to the correct customer. An accurate order fulfilment process is crucial for maintaining customer satisfaction and avoiding costly returns.
Order Fill Rate
It is the percentage of orders that are fulfilled completely. This metric tells you that all the items in the order are in stock and available for shipment. A high order fill rate reflects that you’re able to fulfil orders without delays or backorders, which further leads to satisfied customers and more repeat business.
As the name suggests, inventory accuracy is the percentage of products in your fulfilment centre that are accounted for correctly. This means that you know exactly how much inventory you have on hand, and where it is located. Accurate inventory tracking is crucial for preventing stockouts and overstocks, which can lead to lost sales and increased costs. Sometimes, while using different types of warehouses, it becomes difficult to keep track of all your inventory which can lead to unfulfilled orders and a lot of chaos. Using an advanced WMS from logistics companies such as NimbusPost can be of great help.
Order Lead Time
Order lead time is the duration it takes from when an order is placed to when it is ready for shipment. This includes the time it takes to pick, pack, and prepare the order for shipment. A shorter order lead time means that you’re able to fulfil orders quickly, which leads to happier customers and more repeat business.
Order Pick Accuracy
This accuracy denotes the percentage of items that are picked correctly in each order. This means that the correct items are selected from the inventory and included in the order. A high order pick accuracy rate means that you’re able to fulfil orders without errors or delays, which leads to a happier customer base and repeat business.
Shipment time is the time it takes from when an order is ready for shipment to when it is delivered to the customer. A shorter shipment time means that you’re able to get orders to customers quickly, which leads to delighted customers and repeat business.
The return rate is calculated using the percentage of orders that are returned by customers. A high return rate can indicate problems with order accuracy, product quality, or customer service. Tracking your return rate can help you identify and address these issues before they become bigger problems.
In addition to these key metrics, you may want to track several other KPIs depending on your specific business needs. These can include the following:
- Order volume: total number of orders processed in a given period
- Shipping cost per order: shipping cost of each order
- Labour cost per order: cost of labour for picking, packing, and shipping each order
- Storage cost per item: fulfilment centre storage cost for each item
By tracking these key performance indicators, you can identify areas for improvement in your fulfilment centre operations and take steps to optimise your processes.
How to Pick the Right Fulfilment Partner for your Business?
As a business owner, one of the most important decisions you’ll make is choosing the right fulfilment centre to handle your product storage and shipping needs. This decision can have a significant impact on your business’s success, so it’s essential to choose wisely. Here are some tips to help you pick the right fulfilment centre for your business.
Location: One of the most critical factors to consider is the location of the fulfilment centre. You want to choose a centre that is close to your customers to reduce shipping times and costs. If your business is located in a large city, look for a fulfilment centre that is also located in that city. If you’re selling globally, consider a fulfilment centre that has multiple locations worldwide.
Capacity: Make sure that the fulfilment centre you choose can handle the volume of products you plan to store and ship. Consider the size of the facility, the number of employees, and the available technology. You want a centre that can grow with your business and handle peak season demands.
Technology: Look for a fulfilment centre that uses the latest technology to manage inventory, track orders, and provide real-time visibility into your product’s status. This will help you streamline your operations, reduce errors, and improve customer satisfaction.
Customer service: Choose a fulfilment centre with a dedicated customer service team that can help you with any questions or concerns you may have. Make sure they offer 24/7 support, so you can get help whenever you need it.
Cost: Of course, cost is a crucial factor when choosing a fulfilment centre. That’s why, always look for a centre that offers competitive pricing and transparent fees. So, make sure you understand all the costs involved, including storage, shipping, and handling fees.
Reputation: Do your research and choose a fulfilment centre with a solid reputation in the industry. Look for reviews and testimonials from other businesses to get an idea of their experience with the centre.
Customization: Consider your business’s unique needs and look for a fulfilment centre that can offer customized services to meet those needs. This may include special packaging, labelling, or other services specific to your products.
Flexibility: Choose a fulfilment centre that can adapt to changes in your business. You may need to change your product offerings, shipping methods, or other aspects of your operations. Look for a centre that can accommodate these changes quickly and efficiently.
Whether it’s about choosing the right fulfilment centre or keeping track of the key performance indicators, these help crucially in any business. Consider these factors carefully and grow your business and succeed.