Customer service metrics are Key Performance Indicators (KPIs) in the supply chain process and a critical component of your Supply Chain Management (SCM) scorecard. These metrics evaluate how good you are at fulfilling customer orders and making your customers happy. By tracking these metrics, businesses can identify areas of improvement and enhance their overall supply chain performance.
Here’s a breakdown of the key customer service metrics:
1. Line Fill Rate
Line Fill Rate is one of the most common and widely used metrics. This measures the number of lines in all the purchase orders (PO) received from the customers and scores the lines that are fulfilled entirely and delivered on time, as per the customer's requested delivery date. If this is reported on a weekly basis, this will review all PO lines received during that period, categorizing each line as either a "pass" or a "fail."
- A line is considered “pass" if it is shipped in full and on time.
- A line is marked as "fail" (scoring zero) if it is shipped late or partially filled.
Line Fill Rate is calculated as:
Line Fill Rate = (Number of Lines Delivered in Full) / (Total Number of PO Lines Received)
Some companies erroneously measure this as Fill rate, or total units shipped versus total units ordered during that week, which does not account for on-time delivery or complete fulfilment of individual lines.
2. On-Time Delivery (OTD)
On-Time Delivery (OTD) is the core theme of the fill rate metric. It is closely related to the Line Fill Rate if both time delay and complete fill requirements are used. It is measured as the number of Lines filled 100% and within the time frame requested by the customer.
OTD is calculated as:
On-Time Delivery = (Number of Lines Delivered on Time and in Full) / (Total Number of PO Lines Received)
3. Order Fill Rate
Order Fill Rate is a more stringent measure, as it evaluates the fulfilment of entire orders than individual lines. For an order to pass, every line within that order must be shipped in full and on time. Even if one of the lines is delayed, the entire order receives a failing grade.
While variations of these metrics may exist, the core measure of customer service metrics in supply chain management is On-Time Delivery or On-Time in Full (OTIF). By prioritizing these KPIs, organizations can build a more efficient, reliable, and customer-centric supply chain.
For the detailed information, please check out the video below:
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What customer service metrics does your organization track? Share your thoughts or experiences in the comments below!
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