Your business always wants to deliver the perfect order, and just like app stores, there’s a metric for that. A chief goal of your business is to get the right package to the right address in the least amount of time as possible. There’s a metric called the “perfect order rate” that tracks all of those details to help you discover if your business is meeting customer demands.
Let’s take a quick look at the perfect order rate metric in more detail, discuss why it’s important, and give you some tips to improve each aspect of this all-important barometer for success.
What Is the Perfect Order Rate?
There’s no uniform perfect order rate (POR) for every business. You’ll have to do some tweaking to understand exactly what it means and how you measure it. Thankfully, there are some common aspects of the order that most eCommerce business will want to keep an eye on:
- Order arrives in the system correctly
- Is picked, packed and leaves on time
- Arrives at the customer’s location on time
- Order contents are correct
- Order condition is acceptable to the customer
- Order is accepted and does not cause a return
While advanced companies might be able to weight these questions differently, you can also simply start with a yes/no decision for each order. Essentially, if you ship everything on time, it’s received on time, and there are no returns, you’ve got a POR of 100%.
If you have a few problems, then simply subtract those from your total. The total needs to include the replacement orders too because it is possible for those to be wrong or late.
So, if you shop 100 orders a month and 5 are incorrect, 2 are late, and 4 are returned, then you’re down 11 points. With those numbers, you likely need to ship nine additional orders to make up for the returns and incorrect packages. If those are all correct, then you’ll want to subtract the 11 problems from the total of 109 orders, giving you a POR of 89.9%.
109 total orders – (5 incorrect + 2 late + 4 returns) / 109 = 89.9%
Why should you track POR?
Tracking POR by day, week, or month can help you understand how well your business is doing in terms of meeting customer-service requirements. The higher your percentage, the more likely you are to have satisfied customers.
Tracking is a way to understand the health of your business. Add context to the numbers with adjustments to make this even easier.
Not every business is going to reach 100% and not all need to. If you’re selling clothes, you might have a greater number of returns. So, you can be happier with a lower number, or you can adjust your reporting to only include errors where the order was wrong, late, or the product was damaged.
Tracking your POR can also help you look for concerns within your supply chain. You might be able to discover complications where carriers are damaging goods, if you need new packaging, if a certain carrier or warehouse regularly falls behind schedule, or if there is a certain product that is returned more often.
The POR is a straightforward way to see what’s working and what isn’t in your operations.
5 quick tips to boost your POR
Just like your final values, the ways to improve your POR can vary. So here are five of the best things we can think of to boost your metric and get you thinking about what may work for you:
- Review your picking operations to ensure staff has enough time to prepare your orders each day properly.
- Ship products to your leadership’s home to check if items break or packaging is insufficient.
- Turn over your order fulfillment to a reliable partner with a high delivery-accuracy guarantee.
- Use a system to automate documentation for orders so that customers get the correct items.
- Fire up your warehouse software and create a benchmarking report covering each part of the metric to see performance over time.
These are just a few things you can do to start measuring your warehouse and make use of the POR, arguably the best supply chain metric available in eCommerce.
About the Author
Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.