Use Initial Order Fill Rate to Measure Your Customer Service

When you look at all of the metrics multichannel companies can use to measure customer service, Initial Order Fill Rate (IOFR), or the percentage of orders that shipped complete, is the one that we think is best. But it’s also not often used.

Many consider IOFR to be just an inventory measure. But, its usefulness goes far beyond that. Here are four fill rate metrics and their formulae that companies use:

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Reduce Warehouse Costs with Barcodes

Barcode Scanner

A barcode is a visual, machine-readable representation of data – it is essentially electronic data entry using a scanner.

The data contained in the barcode is typically tied to something, such as a SKU or a purchase order. Once scanned, this data is accessed and displayed for the user to learn more information or take an action.

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How Do I Develop and Implement a Vendor Compliance Program?

Managing vendor relations is an essential part of today’s ecommerce operations. Vendor compliance is a great strategy for reducing costs in your business. A well-thought-out, formal vendor compliance policy can:

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Improving Small and Medium-Sized Warehouse Operations

To determine if your warehouse operation is as efficient as it can be, start with a warehouse operations audit or assessment. This audit takes into account quantitative and qualitative aspects of the warehouse operations, processes, and systems.

First, assess your center’s processes and costs then answer these questions:

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How to Calculate Fulfillment Cost Per Order

Fulfillment cost per order (CPO) is the sum of all the warehousing expenses involved, including:
  • receiving, putting away and storing the product.
  • fulfilling orders through picking, packing, shipping.
  • reverse logistics or returns processing from customers.

Historically, fulfillment managers only looked at the labor portion of the CPO. But, this may only be 50% of the costs. A fully loaded cost per order is a better metric and includes facilities and occupancy costs and packing material costs.

This blog shows you how to calculate the fulfillment cost per order, cost per line, and cost per box shipped.

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The True Cost of a Backorder

A backorder is a customer order for a product from a retailer or supplier that cannot be shipped immediately or by the promised date.  Simply stated, backorders are a temporary out of stock condition.  An order is not a sale that you can take to the bank until the item is shipped or picked up at the store, the transaction is invoiced, and funds are deposited.

The rate of backorder – the percentage of order lines that cannot be shipped out of the total items ordered for the day - is an excellent measure of your inventory management and the customer service you are providing.  An even better measure is the initial customer order fill rate, discussed below.

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27 Point Checklist for Third-Party Logistics (3PL) Contracts

After months of working with prospective third-party logistics (3PL) vendors, you likely received hundreds of pages of selling materials and many verbal promises. A contract will memorialize:

  • the statement of work (SOW) and the 3PL services you are contracting for
  • the standards of performance
  • the pricing of various 3PL services
  • the payment terms
  • a host of legal clauses such as warranty and guarantees, and termination of the agreement

This blog acts as a checklist of contractual considerations to assist you in negotiating a 3PL contract that is fair and a win/win for the client and the 3PL provider acting as your outsource fulfillment provider. 

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How to Reduce Fulfillment Expenses by Streamlining Your Supply Chain

Supply Chain Management (SCM) includes all of the business processes, systems, and services needed to move raw materials and finished product from manufacturers to retailers, distributors, and customers. Like a chain, it is only as strong and efficient as the weakest link. There are many opportunities to make most company’s SCM more efficient, reduce costs, and provide higher service levels to customers.

A typical Supply Chain including Warehousing, Distribution, Information Technology and Transportation Services is pictured below and includes:

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How Companies Save Money Using Third-Party Logistics (3PL)

3PFFor more than 30 years, we have assisted clients in the selection, evaluation, and implementation of third-party logistics (3PL) projects. Clients using 3PL applications span a wide range of companies and industries, including ecommerce, wholesale, retail companies, pharmaceutical samples, collateral distribution, and more. While third-party logistics can benefit a variety of industries, 3PL is not for every company.

Much of our consulting has been in internal fulfillment. This experience provides us perspective on how to compare the cost, service levels, and benefits of both fulfillment models. It is important to fully understand the potential benefits for your company if you are considering 3PL to augment or replace internal fulfillment and distribution.
Let us help with 3PL vendor selectionHere are 6 major ways multichannel businesses benefited from using 3PL and 19 examples of how companies used 3PL profitably:

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14 Considerations for Efficient Ecommerce Peak Season Fulfillment

For retailers and ecommerce companies, peak season can represent 60% or more of the annual sales and an even higher percent of the profit. If you’re a manufacturer or distributor, your business may be dependent on a good holiday season, too. 

By now, your peak holiday season planning for this year should be well underway. If you’re behind schedule, there’s still time to implement improvements. But, you need to be prudent and not over-commit.  Even if you did not do a formal post season analysis, here are some topics to help get you thinking about being more prepared.  

Plan ahead with these 14 critical considerations for improving ecommerce peak season operations and fulfillment this year:

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