Supply chain - Perfect order measurement

Category: Supply Chain KPIs.

If your business deals with a supply chain, then you should be very well informed about the supply chain metrics come in so handy for you and your team. As an integral part of maintaining an efficient business, supply chain metrics are used to monitor your company and consequently, optimize it. One of the most important supply chain metrics you should consider is the perfect order metric. Read on to find out everything about this useful tool.

What is the Perfect Order Metric?

As the name suggests it, this metric measures how perfect an order is, as well as what percentage of orders are carried out error-free. If you want your company to have a perfect order, you should take into account some aspects: it has to be on time, completed, undamaged and last but not least- properly documented. The formula for this metric is:

(Total Orders- Orders with Errors)Total Orders

The perfect order metric is formulated after important data for each metric is collected in time, using RFID. You must consider the percentage of on-time deliveries per 100 orders and multiply all the data above metrics together. Perfect order measurement is a simple, yet efficient process, that should be very easy to apply.

For example, if your company has a 95% on-time percentage, you take that value and multiply it with the other three percentages: completed, undamaged and properly documented. The final step is to multiply the number you obtained by 100. You will then have the perfect order percentage that will offer you a clear idea about how well your company is doing.

How does the Perfect Order Measurement Help?

As a business owner, you want to have a clear picture of your company and always optimize it, so as to obtain better results. In general, supply chain metrics help your company gain visibility and make a better decision, so it is advisable to apply them, even if some of them seem difficult to understand if you are not an expert.

Fortunately, this is not the case with perfect order measurement, as the formula and the percentages are easy to find out and calculate. By applying the perfect order measurement, you make sure your company gains visibility, you allow your team to see where the supply chain needs improvement and where it does not, and it also provides you with the information you need in order to make positive choices. As an entrepreneur, you know how important is for your company to be efficient and for your customers’ demands to be satisfied.

It is very important for your company to have an efficient supply chain and you know it very well. Because a business cannot survive without a functional supply chain, monitoring it using metrics is compulsory. The perfect order measurement metric is the perfect tool to both improve your customers’ satisfaction, correct the errors that may appear in the supply chain process and have a clear picture of everything your business offers.

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