What KPIs should you track to measure order management effectiveness?

2 Order fill rate

Order fill rate is the percentage of orders that are shipped in full and on time, without any backorders, cancellations, or substitutions. It is a measure of how reliable and consistent your order management process is, and how well you match customer demand with supply. A higher order fill rate means higher customer loyalty, lower customer service costs, and higher revenue. To increase your order fill rate, you should improve your demand forecasting, inventory management, supplier relations, and contingency planning processes, and use data and analytics tools where possible.

3 Order accuracy rate

Order accuracy rate is the percentage of orders that are shipped without any errors, such as wrong items, quantities, prices, or addresses. It is a measure of how precise and error-free your order management process is, and how well you avoid customer complaints and returns. A higher order accuracy rate means higher customer trust, lower waste and rework costs, and higher margins. To increase your order accuracy rate, you should implement quality control checks, barcode scanning, verification systems, and feedback mechanisms throughout your order management process, and use standardization and training tools where possible.

4 Order profitability

Order profitability is the difference between the revenue and the cost of fulfilling an order. It is a measure of how profitable your order management process is, and how well you optimize your resources and expenses. A higher order profitability means higher cash flow, lower break-even point, and higher return on investment. To increase your order profitability, you should analyze your product mix, pricing strategy, customer segments, and cost drivers, and use pricing and cost optimization tools where possible.

5 Order satisfaction

Order satisfaction is the degree of customer satisfaction with the overall order experience, from the order placement to the order delivery. It is a measure of how well you meet or exceed customer needs and preferences, and how well you create repeat customers and referrals. A higher order satisfaction means higher customer retention, lower churn rate, and higher word-of-mouth. To increase your order satisfaction, you should solicit customer feedback, measure customer satisfaction metrics, such as net promoter score (NPS) or customer effort score (CES), and use customer service and loyalty tools where possible.