Even with technology advancements and headlines alluding to robot-operated warehouses, most fulfillment centers and warehouses rely on manual labor. In fact, only the largest companies employ and justify advanced automation. Despite the cost prohibitiveness of automation for many companies, manual labor is not cheap, either.Read More >
There are many types of warehouse operational metrics you can use to measure the order throughput, inventory accuracy, cost of departmental operations and customer service.
For 34 years, F. Curtis Barry & Company has assisted clients in defining key metrics, how to measure the operational performance and implement best practices.
Continual process improvement is a principle many companies subscribe to, but they don’t have reliable data to measure productivity of current processes. Process improvement should begin with this principle: “If you have not measured it, you cannot improve it.”
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:
- 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.Read More >
At the heart of process improvement is benchmarking and Key Performance Indicators (KPIs). Lord Kelvin, the British scientist said, “You can’t improve something you haven’t measured”. Here are 5 things to consider in using benchmarking in your business to improve productivity, reduce cost and increase customer service.Read More >
As we shop this Christmas season, we have had three examples that stand out from all the rest:
- We had our first same day order and same day delivery from Amazon.com. It wasn’t something we requested but we pleasantly surprised to get. Amazon has two distribution centers in Richmond, VA where we live. The order was placed on a Saturday in the late morning and delivered within four hours to our home. Frankly, I know that this isn’t an economical option for most businesses (maybe including Amazon). But I’ll tell you it is a formidable marketing weapon. It was extremely fulfilling to receive the item so quickly without leaving home.
You have just spent many months doing your due diligence to replace your aging order management system: gathering user requirements, writing an RFP, getting capable system vendors to bid on it, conducting demos and selecting the finalist. Yet there is one more activity that, if not done superbly, will shake management’s confidence that implementation of the new system will go smoothly.
If you haven’t adequately studied and documented how management, at every level from CEO to department managers, will get the needed information they’re used to having - your credibility could be in trouble. We are talking about the necessary reporting and key performance indicators needed in order to run the business on a daily, weekly, monthly and year-end basis. Even when business analysts feel they have done an adequate job of determining user requirements, the reporting functionality frequently gets cut short. There are a variety of reasons for this:Read More >
We have worked with hundreds of clients over the years to help them calculate and compare their total cost per order (call center and fulfillment functions). We are offering you the opportunity to take advantage of a free offer - if you collect and report what your major costs are for order taking and fulfillment, we will compare your total cost per order against other multichannel businesses that we within our benchmarking database. All companies will remain anonymous and blind to any others that participate. Click to download data collection spreadsheet.
With a recovering economy, many catalog, eCommerce and retail businesses are trying to significantly reduce returns as a supply chain strategy in order to boost profits. Some companies are putting more restrictions and conditions on returns. Frankly, I think this will cause further erosion of sales. Who wants to buy a product that can't be returned, or that carries so many conditions for return? However, others are doing what I call "save the sale", that is, work with customers to help them understand the product and how to install or use it. Consumer electronics, software and technical products are far and away the biggest problem areas that could benefit from this approach. Case in point, recently our consulting firm had lengthy, painful experiences with two of the major U.S. software companies. In dealing with one of the companies, one of our people was transfered to an India-based call center, and spent five hours on the phone while trying to install a new version of software on a laptop. If we had any choice we would have asked for our money back.