Warehouse KPIs and Metrics: Streamlining Your Order Fulfillment Process

Warehouse KPIs and Metrics: Streamlining Your Order Fulfillment Process

As an eCommerce business, handling your order fulfillment forms the basis of your customer experience and brand loyalty. How hard can it be, right? You get the customer’s order, pick the product, pack it, and ship to their door. That might be the case when you are a small business owner and just starting out, but as your business grows, you might want to streamline the process to make sure everything is done to perfection and with efficiency.

Order fulfillment might not be directly linked to your sales, but if you plan to expand your eCommerce business, this is a process that you have to make efficient. To do that, you need to define your warehouse KPIs and track the orders based on them.

It usually involves six steps:

  1. Receiving the goods from the supplier/vendor(s)
  2. Warehouse storage
  3. Picking and packing
  4. Shipping
  5. Delivery
  6. Returns/damages

There are a variety of KPIs that you can use to track your orders and inventory, but these should be related to the six steps of your order fulfillment process to maintain accuracy and maximum efficiency.

Tracking Customer Satisfaction

At the end of the day, what matters is how satisfied your customers are with your eCommerce services. Here’s how you can track your customer satisfaction.

  • On-time shipping percentage: Are your orders sent out on time? Whether you are offering 2-day shipping or same-day shipping, you need to figure out if the orders are processed and shipped within the expected shipping time told to the customers.
  • Total order processing time: People want faster shipping and delivery, which alone determines a considerable part of their brand loyalty. From the time an order is placed, to the product delivery, determine the total time taken. Any order that takes over 6-7 days (unless specifically mentioned) is likely to be canceled or could affect your customer retention.
  • Order picking and packing accuracy: Returns and damages are inevitable on some level, but you can reduce the number drastically if you process the order accurately. The top players of the eCommerce industry report more than 98% accuracy in picking and packing the orders.

Warehouse Metrics

Where you store the products, how you keep them damage-free, and how well you organize your inventory matters significantly. The more accurate your inventory is, the more efficient your demand forecasting, which can help prevent dead stock and save a lot of money.

Dock-to-Stock Processing

This is the time taken for the products to reach your warehouse, from the suppliers, recorded and organized. Many damages that the products face are caused by how they are handled at the dock and while transported to the warehouses. The benefits are not just limited to the faster dock-to-stock processing time when you manage this efficiently.

Inbound Orders

The number of orders processed by one warehouse employee is inbound orders. The more the number, the more efficient the order processing is.

Inventory Management

Matching your physical inventory to the books is easier said than done. There are a lot of factors adding up to efficient inventory management, including lines, received and put away, average warehouse capacity, how the products are categorized and stored, and whether you have an inventory management system in place. If you have multiple warehouses located in different parts of the globe, then you have to include every location and inventory count as part of your inventory management.

Warehouse Workforce

You might find yourself in a pickle if you are short on your workforce to match your demand. Partnering with a 3PL fulfillment partner can ensure that you are never out of the workforce to manage your order fulfillment efficiently and reduce your operational costs significantly.

Operational Metrics

Inventory Turnover Rate

This determines how many units of a particular product you’ve processed and sold. Maintaining an accurate inventory turnover rate helps in comparing the orders fulfilled with the available stock. This metric will also help you forecast the future demand accurately.

Inventory to Sales Ratio

When you carry more inventory than your demand, it’ll add up to your carrying costs. With the pandemic, many eCommerce websites’ inventory to sales ratio has been a bit of mayhem. With proper forecasting, inventory management, and order fulfilling, you can save costs on this.

Seamlessly Manage Your Warehouse KPIs with ShipBots’ Inventory Management Software

Understanding each metric and tracking them can be a daunting task when you are an expanding or established eCommerce business. There’s a breadth of data to analyze, track, and manage; it’s easy to get distracted from the other business operations. Automating your inventory management process with efficient software is the solution to this. Whether you are looking to integrate with various shipping partners, forecast the demand, or process your damages and returns, ShipBots’ warehouse management software can help you with it all.

We will help you identify the problem areas, the risks, the opportunities, and how you can streamline your entire warehouse management and reduce costs significantly at the same time. Get in touch today to learn how ShipBots can help improve warehouse efficiency and productivity.

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