6 Benefits of Perfect Order Metric for Order Fulfillment

6 Benefits of Perfect Order Metric for Order Fulfillment
6 Benefits of Perfect Order Metric for Order Fulfillment

Running a supply chain is complicated. There is constant movement and frenetic activity. There can be chaos, confusion, and miscommunication that lead to delays, errors and losses. While fulfilling a perfect order might look like a dream, it is not impossible.

That is why companies evaluate their performance using the Perfect Order Metric (POM). A metric that is achieved if the order is complete, delivered on-time, without any damages, and with the correct documentation.

Achieving perfect order completion is also the demand of clients. They do not want their orders to be delayed or damaged and thus they sign contracts with service providers that set high benchmarks which have to be constantly met.

But for the service providers arithmetically achieving this metric is a tough ask. Even if they deliver the goods 99% of the time, ensure damage free delivery 99% of the time, prepare 99% perfect documentation, and enable a 99% completion rate, the metric would only come to 96%, when the average is taken. It is easy to imagine how difficult it would be to reach the 100% mark.

6 Benefits of Perfect Order Metric for Order Fulfillment

Difficult does not mean not attempting. Here are some major benefits of using this metric to measure the fulfilment process:

  1. If you want to invigorate an organization into action, the first thing you can do is to create measurements. Once you have goals, the employees know exactly what to aim for. If they achieve it they can be rewarded and if not then they can be penalized. Without goals, the supply chain will never know how much it can achieve if pushed. But once measurements are set, every link in the chain will work hard to achieve those goals and the organization can move towards a better work culture.
  2. Many of the products in a supply chain get damaged easily which means they have to be delivered before they perish. At other times sellers cater to short term demand and they have to sell the products quickly, which also means that the supply chain will have to deliver it quickly. The metrics are a good way of measuring how soon the products can be delivered and if they can be delivered without any loss of quality. Retailers can also insist that the suppliers adhere to the metrics so that they do not face any losses.
  3. Supply chains are often made up of disparate systems that are not well integrated which eventually hamper the final performance. Metrics allow the managers to analyze where the fault lines lie and what impact it is having on the final result. The numbers can also be used effectively when the time comes to finding viable solutions. Finding solutions often involve drilling down to the bare basics behind those complicated metrics and that is why measuring every aspect of the supply chain is so crucial.
  4. The supply chain has to adhere to its standards over a period of time. Achieving benchmarks is not a one-time or seasonal activity. It has to be done over the entire lifetime of the company and there is the threat of clients walking away if they fall at any given point. That is why when metrics start to fall below a certain threshold, managers know that they have to start getting worried.
  5. Metrics also tell you what kind of projects to take up and what promises to make to the client. If the client makes certain demands and the managers feel that they cannot be achieved then the sales team can amend the conditions of the contract accordingly. Keeping a careful eye on the performance measures helps the company decide on SLAs that ensure optimum and practical performance.
  6. Perfect Order Metrics help in lowering costs. As the supply chain moves towards greater efficiency by using better technology and faster methods of processing, there is a positive impact on the expenses.

While it is a critical measure of evaluating performance, POMs have to be looked at realistically. There will be times when a part of the order remains unfulfilled, but the client is ok with whatever the company is able to deliver. In such cases the POMs will need to be amended because the client is satisfied even if the order has not been fulfilled in totality. Then there will be instances when clients make a hue and cry over small errors even though 99% of the order has been completed. Managers also have to realize that moving from a 98% performance level to 99% performance level is considerably harder than moving from 88% to 90%.

Maintaining POMs requires quite a bit of effort on the part of the MIS team who will not only have to religiously update all the numbers, but also prepare dashboards, tables, charts, and graphs to explain their findings to the concerned managers. To achieve the perfect metrics the process managers have to understand the needs of the clients, keep communication channels open with them at all times, manage the flow of orders, and ensure that there are always enough regular and back-up employees to handle the workload.  Taking the help of an expert in Finance and Accounting Outsourcing would provide organizations with the knowledge and the expertise for carrying out managing their order fulfilment process successfully and competently. 

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For more information on how Invensis Technologies will effectively manage your Order Fulfilment through Finance and Accounting (F&A) BPO Outsourcing Services, please contact our team on US +1-302-261-9036; UK +44-203-411-0183; AUS +61-3-8820-5183; IND +91-80-4115-5233; or write to us at sales {at} invensis {dot} net

2 COMMENTS

  1. Great article. Metrics are critical, not just for increasing the efficiency of order fulfilment, but for the best customer experience. There are numerous variables and external factors involved. Devising strong measurement systems need to be in place for optimal control.

  2. This is nice post you shared here and is very informative. I am a service Associate at Cogneesol, a global most reputed business outsourcing company. I want to draw your attention towards the another benefit of a perfect metric as discussed below:

    Automation and process improvements are big keywords these days. What is the extent of the automation,how much of the process is done manually, has the error rate decreased, are the orders being fulfilled faster and is the cash being collected quicker-all these questions need to be regularly answered so that improvements can be made.

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