Do you ever wonder how quickly you should aim to fulfill your customers’ orders, and what they would say if their orders came quickly? The answer lies in order cycle time, the amount of time it takes for a customer to receive their online purchases. By understanding this metric and improving your e-commerce business’s order fulfillment process, you can deliver an excellent customer experience that helps drive sales. In this article, we’ll walk through what order cycle time is and discuss best practices for keeping it as minimal as possible.
What Is Order Cycle Time?
Order cycle time (OCT) is one of the most important metrics to measure in a business. It represents the total amount of time it takes an organization to complete an order, from the time when it is created until it is delivered to the customer. Order cycle time is an important measure of a business’s efficiency. It gives them a way to determine whether they are ordering goods and stocking them quickly enough so they can meet their customer’s demand without holding excess inventory.
Understanding the order cycle time gives businesses insight into how well their ordering process is run, and it informs them as to whether they would benefit from placing orders more frequently for an increase in velocity or reducing orders for lower inventory levels. By looking at this metric closely, companies can optimize procedures and make sure they are consistently delivering orders on time or ahead of schedule.
Additionally, tracking order cycle time helps managers observe trends in the market and plan ahead, increasing their chances of success. Ultimately, understanding their order cycle time helps businesses make strategic decisions that lead to higher profits and successful operations.
How Do You Measure Order Cycle Time?
Measuring cycle time involves calculating the total time it takes to complete an entire order—from when it’s placed on, through all steps of production, delivery, and payment.
A company may measure their average cycle time over the course of a month or year, or they may analyze the individual cycle times for an order to see where delays stemmed from.
Using this data, companies can work to reduce any bottlenecks in the process and create more efficient methods that result in shorter cycle times overall. With proper tracking and analysis of order cycles, businesses are able increase both the efficiency of their operations as well as customer satisfaction with faster delivery.
How to Improve Order Cycle Time?
Improving the order cycle time is an important way for businesses to increase efficiency. Below are some steps to follow:
Improve Warehouse Flow
One of the most effective ways to improve order cycle time is to look for areas of improvement in warehouse flow. This could include streamlining processes such as prepping, packing, and shipping orders more efficiently. In addition to streamlining processes, warehouses can benefit from utilizing the latest technology and automation tools available, including automated inventory systems, mobile scanning technology, and automated picking systems. Implementing these tools would drastically reduce cycle time while also increasing accuracy and efficiency within the warehouse.
Provide Employees with the Tools They Need
In order to improve order cycle time, companies must invest in resources that help employees complete the process more efficiently. Employees need the proper tools to be able to do their job properly and on-time. Providing them with updated technological features for their work desktops or mobile devices can give them access to the information and data they need quickly, allowing them to finish tasks in a timely manner. Investing in software systems that incorporate automation and artificial intelligence can also help reduce human errors, minimizing cycle time.
Configure Protocols and Restrictions
The most essential step in improving order cycle time is configuring protocols and restrictions that will help streamline processes and keep customers informed throughout their transaction. Setting clear expectations on how long orders take to prepare and ship, as well as realistic timelines for restocking depleted inventory, allows customers far more peace of mind in the purchasing process. Make sure the protocols can easily be adjusted, if necessary, since customer needs and market fluctuations can change quickly over time.
Keep Measuring Cycle Time
By measuring order cycle time regularly, you can identify inefficiencies or bottlenecks that are causing delays and see if improvements need to be made. Once these areas of improvement are identified, processes can be adjusted and new technology can be introduced to better manage workflow and ensure that orders are delivered quickly. Through these adjustments, not only will the efficiency of production increase but customer satisfaction will also improve due to faster delivery times.
Outsource to a 3PL Provider
One way to help improve order cycle time is to outsource a 3PL provider, which stands for third-party logistics provider. They specialize in supply chain management and can provide all the necessary services to quickly process and ship orders accurately, efficiently and on time. Businesses can also benefit from working with a 3PL provider as they provide valuable insights into how to improve their logistics processes further and identify any potential problems or tight spots within their supply chain that need attention.
How Can Lean Supply Solutions Help?
Lean Supply Solutions can be a great asset for businesses of all sizes. We have decades of experience in all aspects of the supply chain, from our manufacturing connections to our courier services. With our software and lean methodology, we efficiently manage inventory, warehousing, and distribution processes, so that you can get the most from our third-party logistics services. We ensure that your customers get their products at the right time, and offer you consistent, accurate, and quality results.
Our services include contract logistics, manufacturing support, consulting and project management, product and order fulfillment, warehouse and distribution, e-commerce fulfillment, pick and pack, and more. Contact us to learn more about how we can help you improve your cycle time!