What is order cycle time?
The average time it takes to complete a transaction from the moment it is placed, excluding the actual shipping time, is known as order cycle time. This is one of the most essential KPIs you should be aware of in your order fulfillment process since it allows you to assess the performance of your operations.
Ways to improve order cycle time
You may need to optimize several elements of your supply chain procedures in order to reduce the time it takes for your order process.
1. Improve your warehouse flow
Bottlenecks in warehouses can lead to longer order cycle times. For example, are pickers able to find things easily? Are the shelving racks spaced out properly so that pickers may move about quickly? Is your fulfillment bay currently too far away from the picking area? These roadblocks might cause the picking and packing procedure to be slowed down.
You can cut order cycle time by identifying these inefficiencies. Start by measuring your warehouse KPIs and seeking for ways to improve them. You may need to optimize your warehouse setup and utilize warehouse slotting to get the most out of limited area and enhance picking efficiency.
2. Set protocols and limits
It’s important to establish clear standards and procedures for your fulfillment staff to follow. This might involve limiting the number of items picked in a batch to speed up the procedure and get products on the shelves more quickly. You can also establish standards for when and where items should be returned so that they may be quickly sorted or picked up later. Setting inventory reorder parameters is one more important action to avoid stockouts and backorders, which might slow down your order processing time.
Consider how you’re presently dealing with delayed deliveries. You should establish policies on what to do with the data in the event of delivery delays, in addition to providing your employees real-time ecommerce order tracking. For example, establish a clear plan for when and how to follow up after an order is delayed at a certain location.
It’s also critical to communicate with your consumers about your shipping procedures in order to set reasonable expectations.
3. Continue measuring cycle time
Delivery time will vary from one order to the next, especially when there are changes or disruptions in the supply chain. An unforeseen delivery problem, for example, might result in a much longer order cycle times than usual. You’ll improve warehouse receiving processes by automating them. After you’ve done this, you may notice a shorter order cycle time, as well as fewer errors in the shipment process.
Furthermore, having to deal with a high number of returns might distract your warehouse employees from completing fulfillment tasks since they are too busy recording and sorting them. Many factors beyond your control can influence this order cycle time throughout your supply chain.
There are several factors that impact this measure, both internally and externally. It’s critical to keep an eye on and reevaluate your order cycle time on a regular basis. You may use this information to evaluate whether you need to examine your supply chain practices and make improvements. It’s also a fantastic method to see if your adjustments are working and speeding up your cycle time.
4. Outsource fulfillment
By outsourcing the fulfillment process to a third-party logistics provider, you can ensure that orders are quickly received, picked, packed, and shipped out. Look for a 3PL that is technologically savvy and capable of automating significant portions of the fulfillment operation.
For example, the 3PL should have technology that works in conjunction with your online business. As soon as consumers place orders, they are immediately sent to their warehouses and fulfillment centers.
You can process orders by utilizing the pre-ship function to have them shipped out to your clients in as little as a few hours. Furthermore, automating the procedure will reduce the need for manual entry, decreasing order errors while also improving order accuracy.