Order fulfillment is the most crucial and labor-intensive process within a distribution center (DC). As a cost center, order fulfillment and replenishment typically account for 50–65 percent of warehouse labor expense. For this reason alone, continuous improvement of the order fulfillment process is critical. The ability to assess productivity and efficiency via order fulfillment metrics provides the shortest route to improved performance and better planning — in both manual and automated systems.

Many metrics can be used to analyze and optimize your order fulfillment system. These include order fill rate; order accuracy; order cycle time; inventory days on hand; storage usage; on-time delivery; cost per order; productivity; and system utilization, among others. Each provides a different view of how your operation is performing. 

In this white paper, we’ll discuss what in our experience comprises the top three order fulfillment metrics from a DC manager’s perspective, and provide guidelines for implementing measurement solutions within your DC or warehouse.