Saving time is of equal importance to saving money for your business. Cutting down on your order cycle time will save you both. The faster you can pack and ship your orders, the more your company will benefit.
Here are a few key reasons why it’s important to improve your order cycle time and a few ways to do so.
What is Order Cycle Time?
The term “order cycle time” (OCT) refers to the time between when a customer places an order and when they receive it. The total time of manufacturing, fulfillment, and shipment is all factored in.
There are three sub-categories of order cycle time to keep in mind:
1) Manufacturing cycle time.
2) Procurement cycle time.
3) Delivery cycle time.
It is important to reduce your order time cycle to as few days as possible. Fast delivery and effective inventory all work together to keep customers happy. This can be a challenge since a variety of outside factors can affect your OCT. Some of those changes include:
· How many stock-keeping units are involved in a shipment.
· How difficult an individual order is to assemble.
· Component lead time.
· Changes in the supply chain.
· Fluctuations in the season due to holidays or inclement weather.
· Customer demand.
All these factors affect your OCT, and in-turn your customers.
Customer satisfaction and customer loyalty are two fundamental reasons to improve your OCT.
Your customers do not have to buy from you. They have a variety of different vendors to choose from who are all doing exactly what you are doing.
If they choose you, and your service is slow, they will choose one of the competitors the next them they shop.
The speed and quality of fulfillment and shipping are imperative for customer retention. If your company lacks them, it will also lack customers.
How To Improve Order Cycle Time?
It is important for your company to strive to reduce order cycle time for two reasons.
First, it will lead to greater customer satisfaction and higher customer retention. Most customers have an unrealistic expectation of “next-day delivery”. So the longer it takes you to ship to them, the more dissatisfied they will be. The faster a customer can receive their package, the happier they will be.
Second, it will lower your inventory levels and keep products moving. If your are not selling your product, then they are not earning you money. The longer they sit, the more they are costing in your storage fees. Shorter OCT will promote more orders and faster turnover.
Here are four ways to help your business improve its order cycle time.
Track Your Inventory
Using software to keep track of your inventory is the first step to reducing your order cycle time.
When you track your inventory, you know exactly how much product you have at any given time. This is important when it comes to forecasting how much you will need in the future. If you are able to know your future needs, you can keep inventory low but never run out.
High inventory levels will leave you with more products to sort through. The more you have to sort through, the longer fulfillment will take. Delays in fulfillment lead to delays in delivery. Your customers could then become dissatisfied with your service.
Efficient inventory software can help you improve customer satisfaction.
Warehouse flow is the way that inventory moves through a warehouse. It involves everything from when a product enters the warehouse to when it is shipped.
Improvement of your warehouse flow will reduce the risk of broken or lost inventory. This will then improve your order cycle time.
Consistently Measure Cycle Time
It’s important to keep track of the order cycle time for each order that comes through. If certain parts of the fulfillment process are taking too long, you will be able to see it and work to fix it.
Use a Third-Party Logistics (3PL) Provider
Outsourcing your storage, fulfillment, and shipping to a quality third-party logistics provider makes a significant reduction in OCT.
They already have warehousing, machinery, and well-trained staff to do the job. With their help, you can track inventory, fulfill orders, ship orders, and provide quality customer service. This will allow your company to be more productive.
Smart Parcel 24/7 Will Reduce your OCT
If you would like to improve your order cycle time and improve customer retention, Smart Parcel 24/7 can help.
Our network of warehouses ensures fulfillment will take place near your customers. Less distance to travel means faster shipping. We have experienced and well-trained employees. Your orders will be fulfilled exactly how you like them and shipped to your satisfied customers with the greatest speed.
Your products will be sent using a mailing route specifically crafted to your needs. We can do this through our extensive network of hundreds of mail carriers across the world. With such a short order time cycle, your customers will retain their good opinion of your brand. And you will retain your customers. What could be better than that?