Customer Order Cycle Time

Category: Supply Chain.

As the head of an organization, you must already know how important your customers are for the growth of the organization. Customers are not only the core element of success, but also they are the top priority of your business goals. So fulfilling their demands and needs will definitely delight customers and strengthen your relationship with them and thereby it creates a good rapport that lets them make a regular visit to your brand/ service.

So That’s why many organizations regularly update their brand and service to create awareness and to fine tune their business according to the needs and wishes of the customer. So how can you make sure that the orders that you’re fulfilling reach their expectations? If not, what are the criteria that you have to focus on to improve your services.

First of all, while managing orders you need to be professionally strong in maintaining an effective and a fluent supply chain. Supply chain is the benchmark of all businesses. It is a cycled process that confirms consistent, effective, and a smooth delivery of products or services from the supplier to customer. And you have to make sure to ignore ineffective, incompetent or fragmented chain process otherwise it will become a big hurdle in your commercial prospects.

Speaking of metrics, the first and foremost thing that you have to concentrate on is a good goal management software that helps you manage your task and goals efficiently. OKR tools are being used world wide by leading organizations to manage tasks and performance of your organization in an effective way. Profit.co is one such tool that delivers impressive management of OKR, Task and Performanceof an organization.

To achieve this, you should be well informed about the supply chain metrics, because they are an integral part of maintaining an efficient business. These metrics are used to monitor your company and consequently, optimize it.

One of the most important supply chain metrics you should consider is the customer order cycle time. Read on to find out everything about this useful tool that will help your company evolve fast and easily.

What is the Customer Order Cycle Time Metric?

This metric deals with measuring how long it takes to deliver a customer order after the purchase order is received by your company. The customer order cycle time metric will show you exactly the average cycle time, typically in days including the weekends, between order placement by the customer and the order delivery to that specific customer.

It is an easy, yet very effective formula that will always keep you and your team informed about how efficient your supply chain process is and how well your company manages to fulfill your customers’ orders with automated order management. You will then have the chance to find ways to optimize your services and evolve constantly by monitoring the order frequency.

The formula of this metric is the following:

Customer Order Cycle Time
=
Source Cycle Time + Make Cycle Time + Delivery Cycle Time.

As you can see, this metric depicts a process which occurs at the interface between the retailer and the customer. Therefore, it involves the processes which includes the part of receiving and filling the orders sent by customers. It starts when the customer is interested in the services your company offers and decides to make use of them and it ends with the same customer receiving his/ her order once and again.

This Process can be Clearly Divided into Four Stages:

  • Customer arrival: Represents the moment when the customer realizes he wants/ needs your company’s services and communicates his/ her wish to your firm. His/ Her wish becomes an order, sent either by phone call or by mail;
  • Customer order entry: involves the specific client informing retailers what he/ she wishes to buy. The aim of the customer order entry is to be as quick and efficient as possible. All the supply chains affected should receive the information as well; Customer order fulfillment: the order is filled and sent to the customer, after going through a series of processes: picking the product from the inventory, packing it, transporting it to the destination;
  • Customer order receiving: The product gets to its destination and the customer receives the order in time.All the stages of this smooth process can be easily kept under control with the customer order cycle time metric. It’s easy to apply, useful and it helps you optimize your services constantly and keeping your customers happy.

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