Supply Chain

The Importance of “Perfect Order” and How it Affects Your Business

It’s not a new concept by any stretch of the imagination, but “Perfect Order” is back in the spotlight again as it rolls off the tongues of industry thought leaders and journalists. But why is it getting so much attention again? It could be that despite innovations in technology, only 84% of orders are considered “perfect.” It’s no wonder it’s the KPI all companies need to make a priority in 2018.

What is “Perfect Order?”

Perfect Order is defined as, “An order which the ‘seven R’s’ are satisfied: the right product, the right quantity, the right condition, the right place, the right time, the right customer, the right cost.” However, the Warehousing Education and Research Council (WERC) has narrowed the requirement down to four metrics: completeness, on time, free of damage, and with the correct documentation and invoicing. Some companies choose to create their own metric with their specific industry, mission, and benchmarks in mind. Regardless of your specific metrics, smart businesses must be sure to make reasonable plans and achievable goals for steady growth.

The Growing Demand for “Perfect Order”

It’s a buyer’s market! Blame it on Nordstrom or Amazon, but customer-service expectations are getting higher and higher. Competitors continue to grow in every industry. In 2017 alone, eCommerce grew by 13%, creating more options for consumers. As a result, more companies are putting greater focus on the customer experience from website navigation to transparency in tracking to branded packaging and shipping. To stay relevant (and in business), companies must make the top-down customer experience a priority to engender brand loyalty and capture market share.

The ways “Perfect Order” can positively and negatively affect the business

The positives of “Perfect Order” aren’t tough to consider. Happy clients mean return business. Very happy clients will buy more often, be brand loyal, and recommend your company to friends and family. Also, the higher the level of satisfaction on delivery, the lower the instance and cost of returns processing and rework. Companies with high scores also run more efficiently—they carry less inventory, have fewer stockouts, and experience shorter cash-to-cycle times.

At a certain point, aspiring to get a high “Perfect Order” status can be detrimental to the business. Many businesses can lose profit by hastily implementing too many strategies at once. They can also offer things, like same-day shipping, that is costly and not especially important to customers, and end up resulting in more errors than initially experienced.

As the marketplace gets more and more competitive, take a moment to consider “Perfect Order.” Do you know your score? If not, meet with your team immediately to put a metric into place. If you want to find an instant solution with less muss and fuss, consider partnering with Langham Logistics for your logistics needs.

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