Blog Post
Thanks to the performance of well-resourced eCommerce giants like Amazon, today’s customers expect every order to be perfect, meaning that the shipment is accurate, on time, and complete. While 81% of businesses believe they are meeting customer expectations, only 20% of buyers agree. Even the smallest order error or delivery delay can damage customer satisfaction.
Read on to discover how implementing automation across ordering procedures enables you to optimize efficiency, improve accuracy, and elevate your perfect order rates.
What Is a Perfect Order Rate?
A perfect order rate is a key supply chain metric that measures the timeliness, accuracy, and efficiency of order fulfillment. It can consider several factors including:
- Delivery timing
- Accuracy of fulfillment
- Product condition
- Packaging
- Product quantity
- Documentation
- Invoicing
Sometimes also referred to as order accuracy rate, perfect order index, or perfect order fulfillment rate, achieving a high perfect order rate indicates an efficient and reliable supply chain operation.
How to Calculate Your Perfect Order Rate
The first step in improving your perfect order rate is to accurately gauge your current performance. Here is a breakdown of how to determine your perfect order rate:
- Define key metrics: Decide what a “perfect order” means for your company. For example, it might need to tick all these boxes:
- Delivered on time, in full
- Delivered in accurate quantities
- Delivered with no damage
- Delivered with complete documentation
- Count your orders: Now, you can tally the orders meeting your "perfect order" criteria along with the total orders handled by your company over a set timeframe, for example, one month.
- Calculate your perfect order ratio: Divide the perfect order tally by the total orders to produce a decimal ratio. For example, if your company shipped 2500 orders perfectly out of 3000 total orders, divide the number of perfect orders by the total number:
- 2500 ÷ 3000 = 0.833
- Convert to a percentage: Next, multiply the ratio from the previous step by 100:
- 833 x 100 = 83.3
Giving you a perfect order rate of 83.3%
- Drill down: You can also use a more comprehensive calculation to help you identify which specific aspects of your orders need the most improvement. For example:
- Perfect Order Rate = (Percent of orders delivered on time) x (Percent of orders complete) x (Percent of orders damage-free) x (Percent of orders with accurate documentation) x 100
Why Is Perfect Order Rate Important?
Overall customer satisfaction increasingly hinges on flawless order fulfillment. While average U.S. perfect order rates hover at around 90%, top performers push above 95%.
Meeting or exceeding this target brings many advantages to your organization, such as:
1. Increased Customer Satisfaction
Customers who experience perfect orders are more likely to give you repeat business and recommend your company to others. However, they are also quick to judge when deliveries don’t meet their expectations. Even one late or inaccurate order can permanently tarnish your brand image: A single disappointment encourages 32% of customers to abandon preferred brands, and 69% are less likely to reorder from you if deliveries are late. Increased customer churn is the top consequence of missed on-time and in-full delivery.
2. Reduced Fulfillment Costs
A higher perfect order rate means a reduction in the costs associated with order errors, such as returns processing, refunds, and customer appeasement. The average cost per order error is $17,800, with $5,000 in direct costs and $12,800 in follow-up activities like goodwill packages.
3. Heightened Competitive Advantage
Companies that achieve high perfect order rates differentiate themselves and gain an edge over competitors by giving customers what they want. Customers are more likely to choose providers with a reputation for reliable and accurate order fulfillment every time.
Conexiom's order automation platform helped Werner Electric Supply transform its management of over 24,000 SKUs. By digitizing paper-based forms and automating workflows between sales reps, warehouse staff, and accounting, Werner streamlined its order processing and fulfillment. This shortened the average order cycle time from 3 days to just 4 hours, saving the company around 6,263 hours annually in manual data entry time.
How to Identify What's Lowering Your Perfect Order Rate
It's important to regularly monitor your perfect order rate to identify issues as they emerge. This allows you to remedy problems and optimize operations before customers are impacted. Here are the best ways to identify what is lowering your rates:
● Measure Order Performance Directly
While your perfect order rate provides a high-level view of current order fulfillment, you also need to examine how you measure outcomes and identify how reliable your feedback loops are. Tracking specific KPIs like on-time shipping and completeness at the order level provides this deeper insight and reveals where attention is most needed to resolve delays or avoid shortages.
● Look for Indirect Warning Signs
If Net Promoter scores, CSAT, or customer churn are declining while returns and expedited shipping are rising, this could be a warning that you need to pay closer attention to your perfect order rates and resolve performance issues before they become challenges.
● Identify Improvement Opportunities
Identifying which of your order categories cause the most delays and errors is key. For example, companies placing ad-hoc or small-batch orders tend to be among the hardest to fulfill accurately, and research shows that manual orders experience 28% more delays/missed deadlines than automated ones. Examining your perfect order rate using analytics software can reveal these types of issues. It allows you to drill down to find specific areas needing attention, such as order formats or customer segments with lower performance. Tracking metrics over time also helps evaluate the impact of process changes on your fulfillment improvement efforts.
What Are the Challenges in Achieving a High Perfect Order Rate?
Striving for orders that are fulfilled accurately, on time, and damage-free is an important goal for many companies. However, there are some common obstacles that can make it difficult to achieve perfect order rates of 95% or more consistently:
-
Manual data entry: Entering order information by hand into multiple systems is tedious and time-consuming, and it can slow down your whole order fulfillment system. It also opens the door to human error, ultimately leading to orders getting lost, deliveries being sent to the wrong location, or incorrect billing.
- Siloed systems: Without a unified integration of systems and information flow across departments, order fulfillment can be harmed by process inefficiencies and data discrepancies. Fragmented infrastructure directly contributes to lowering perfect order rates.
- Inefficient inventory management: If inventory levels and availability aren't accurately tracked across locations, products may be out of stock when orders need fulfilling, resulting in backorders or substitutions.
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Multiple document formats: With orders coming in on paper, by email, or through EDI channels, managing high volumes of documents in multiple formats significantly increases complexity and heightens the chances of errors occurring during order capture, processing, and fulfillment.
How Order Automation Boosts Perfect Order Rates
Manual data entry, siloed systems, and multiple document formats make achieving consistently high perfect order rates challenging. The most reliable path to achieving perfect order rates is by streamlining your operations with business document automation.
By digitizing paper-based processes and integrating your systems, you can eliminate tedious data entry and manual handoffs between departments.
Conexiom’s automated order processing helps you overcome these hurdles and boost fulfillment performance.
For example, Field Fastener used Conexiom to automate its sales order and order acknowledgment processes, freeing up thousands of hours per year for its customer service teams. This allowed representatives to spend more time providing a best-in-class customer experience through activities like cross-selling instead of being bogged down with administrative tasks.
Conexiom's intelligent order capture and workflow management solution can digitize the entire order-to-cash process. By eliminating paper and integrating systems, Conexiom streamlines order handling from start to finish.
Conexiom’s key benefits include:
● Automated Data Capture
Conexiom's intelligent data extraction uses AI and machine learning to process both structured and unstructured data types, eliminating the need for manual data entry and reducing the risk of errors. Because Conexiom can accurately extract data from various formats, including paper, email, and PDF, you can upgrade your operations without requiring your customers to change how they order.
● Streamlined Order Processing
Order documents are automatically classified, and essential information is captured upon receipt. The system then intelligently routes each order to the correct internal team or external supplier based on predefined criteria. This expedited routing process helps ensure on-time fulfillment rates.
● Seamless ERP Integration
Conexiom seamlessly integrates with major ERPs like SAP, Oracle, and Infor to maintain real-time synchronization. Changes to any order data in one system are instantly reflected across all connected platforms, helping to maintain accurate and up-to-date information, preventing stockouts or overstocking, which can impact perfect order rate.
● Customizable Workflows
Conexiom's solutions can be customized to your company's specific order processing requirements with configurable workflows to fit each business process. For example, if orders over a certain dollar threshold require manager approval before processing is completed, Conexiom can be tweaked to incorporate that rule.
● Scalability and Flexibility
As business needs change or volumes increase, Conexiom's cloud-based infrastructure easily scales to support growth without limits. The platform can also adapt to accommodate new document formats or process adjustments over time as requirements evolve.
With Conexiom, you can cut the supply chain costs caused by fulfillment mistakes while boosting on-time delivery, inventory accuracy, and customer satisfaction. With optimized operations and higher perfect order performance, you can drive new business and increase loyalty.
Learn more about how Conexiom’s intelligent order processing capabilities can support your growth and success.