Perfecting Your Supply Chain with the Perfect Order Index
Getting customer’s orders out to them on time can be an issue for any business relying on a supply chain. Implementing a perfect order index can greatly help your company to improve its supply chain and reach that perfect order, along with high customer expectations.
What Is the Perfect Order Index?
You may be scratching your head wondering what the perfect order index is. In short, the perfect order is a key performance indicator. This can be used to measure the sales order of customers or a purchase order from your suppliers. It can be used to measure how effective the supply fulfillment is at the transactional level and then goes on to higher reporting after being aggregated.
One sure way of losing customers is by sending out orders that are late, damaged, have not been packed correctly or has part of the order missing. All of these issues can be frustrating to the customer, who may not order from you again. Issues with the supply chain can cost more than your reputation. They can cost your company money, as goods have to be reshipped if they are damaged, and you suffer the cost of lost goods. This is why it is essential for a perfect order the first time around.
So what is the perfect order? In the basic sense, an order can be classed as being perfect if it meets certain criteria. In short, it is an order containing the correct product/service that reaches the correct customer in the correct place at the right time. Therefore, the perfect order consists of:
- 100% delivery on time – at the correct time;
- 100% order fill right – correct quantity delivered;
- 100% quality – in perfect condition;
- 100% documentation – invoice, return sheet, etc.
The above not only applies to sending orders out to customers, it also applies to you having your orders fulfilled by suppliers. Both are, as important, in the correct running of your business.
Benefits of Incorporating the Perfect Order Index in Your Supply Chain
Hopefully, you will now have a better understanding of what the perfect order index is and how it can help your business by keeping customers happy. Now, we will look at some of the many benefits of incorporating the perfect order into your supply chain.
Using Metrics to Establish Delivery Times
Companies who sell products that are perishable, or where there is a need to sell them quickly, as the product has a short shelf life, can benefit from using metrics. Metrics can measure how soon products can be delivered and the chances of them being delivered without losing quality. When working with retailers, they often ask that companies use metrics to help minimize losses.
Keeping Costs Down
When using perfect order metrics, your company has the ability to lower costs. This is achieved as the supply chain is more efficient thanks to the use of better technology, which means processing orders faster.
Analyze Faults in the Supply Chain
If supply chains are not integrated well, they will hamper a company’s performance. However, implementing the perfect order index metrics allows analysis of the supply chain, which reveals where gaps and inefficiencies remain and can help you discover a solution.
Identifying Errors in the Supply Chain
Metrics can help in identifying errors in the supply chain. Measuring the percentage of the perfect order can help your employees in the logistics department find the exact percentage of error-free orders. This is possible using a perfect order calculator and the formula (total orders – orders with errors)/total orders)*100.
When the key metrics have been measured, it is possible to implement strategies that will eliminate errors in the supply chain. The perfect order index can help in targeting areas that need to be looked at closer.
Implement the perfect order index in your company and it can help you to reach satisfaction levels of 99.9% or greater.