Poor inventory control can increase your inventory costs and have a major impact on the overall performance of your business, decreasing your sales and having a negative effect on the customer experience. But there are a few very important inventory control performance metrics that can work for you, helping you optimize your inventory for maximum performance. Discover them below.
Order Cycle Time
This metric refers to the time it takes your business to fulfill a customer order. It is often measured from the moment when the customer places their order until the ordered products have been delivered at their address. The order cycle time metric is especially important for e-commerce businesses that ship their products nationally or even internationally and promise a speedy delivery. In today’s competitive online environment, striving to improve the performance of your order cycle time metric can help you stay ahead of your competitors.
Item Fill Rate
This important metric refers to the percentage of products ordered by your customers that you have actually been able to ship. Having a high item fill rate means your inventory control app and the inventory management strategies you are using are working. A low rate, on the other hand, is a major sign that you need to rethink your strategy and perhaps also upgrade your inventory app before you lose customers.
It is important to track and measure the item fill rate for individual orders as well as all for all orders, and to do it continuously, noting seasonal differences and using it to better understand product demand.
This metric reflects the number or percentage of customers who place an order for one or more products that you cannot fulfill because the product(s) are not in stock and who instead buy them instead from your competitors. The lost sales metric can be an eye-opener that immediately draws your attention to major inventory control problems. Tracking lost sales becomes a lot easier with an order management and inventory tracking app such as DataQlick, which can effectively track back orders, as well as provide you with a wealth of other relevant inventory data.