Top 14 Distribution Metrics and KPIs for Online Businesses to Monitor in 2023 to Enhance Operational Efficiency
eCommerce shipping is essential to the distribution process, with 43% of online customers wanting speedy and trustworthy deliveries as the most significant aspect of their overall purchasing experience. It is no mystery that supply chain organisations encounter various difficult and unpredictable situations. The eCommerce industry has been affected by supply chain issues during the past few years on a global scale. The competition is growing daily, and at the same time, customer demands are rising. Most critically, profit margins are shrinking.
Doing all in your power to reduce expenses, grow sales, and improve profitability is essential today. On paper, that sounds wonderful, but how do you genuinely pinpoint each process and function that has bottlenecks and where new chances to save money might be discovered?
The correct distribution metrics will support the direction of your eCommerce business and keep you well-informed with current, comprehensive, and exact key performance indicators (KPIs) fueled by accurate data ingested from your enterprise resource planning (ERP) solution. Armed with this knowledge, you’ll be able to make informed decisions supported by facts and figures, which will help you improve your bottom line and move forward in confidence.
- What are Distribution Metrics or Distribution KPIs?
- Top 14 Distribution Metrics and KPIs for eCommerce & D2C Businesses To Track in 2023
- On-Time Delivery (OTD)
- The Volume of Deliveries
- Customer Grievances
- Order Delivery Accuracy
- Total Order Cycle Time (TOCT)
- Transit Period
- Picking and Packing Cost
- Back Order Rate
- Storage Capacity
- Loss of Sales
- Picking Accuracy
- Utilization of Labor and Equipment
- The Ratio of Inventory Turnover
- Dock to Stock Cycle Time
- WareIQ As Your Distribution Logistics Partner
- Distribution Metric & KPI FAQs: Frequently Asked Questions
What are Distribution Metrics or Distribution KPIs?
Measuring the effectiveness and performance of the flow of goods from a distribution centre or warehouse to the customer is the focus of distribution KPIs (Key Performance Indicators) and metrics. Processes, including channel design management, third-party logistics, fleet management, logistics health & safety, and order picking and shipment, can all be overlaid with distribution metrics.
WareIQ, an eCommerce fulfillment company, empowers online brands with a superior-tech platform to compete with Amazon like service levels by bringing their average delivery timelines from 5-10 days to 1-2 days.
Top 14 Distribution Metrics and KPIs for eCommerce & D2C Businesses To Track in 2023
There are numerous measures and distribution KPIs when it comes to monitoring the performance of eCommerce logistics. However, your ability to meet consumer expectations and profitability is impacted by the key indicators you prioritise.
The following list of distribution metrics should be monitored.
On-Time Delivery (OTD)
This is one of the important distribution metrics you’ll use to gauge how effectively your processes operate when on-time delivery is considered. It may be calculated by dividing the number of goods you supply by the total number of units you send.
How “on-time delivery” is defined on various factors, including your clients and industry, and whether the items were delivered by your company directly or by a third-party source. If partial deliveries are regular, OTD In-Full is a valuable signal to help you delve into more detail.
The Volume of Deliveries
With a top-notch ERP system, keeping track of how many deliveries you make over a given period will be simple. Using this data as a baseline, you can then assess how your distribution operations are doing moving forward. You can use this distribution metric to determine your company’s growth potential by examining your regular shipments.
Your assessments of the quantity of delivery can also assist you in finding important details about peak times, rush hours, and other things. You can then assign resources with this data so that you’ll be prepared when your clients call.
Customer satisfaction should always be your company’s priority. If this is the case, you should look at the number of customer painpoints and problem occurrences. However, keep in mind that a variety of issues, such as picking errors, shipment damage, and mis-ships, to mention a few, can lead to customer complaints.
It’s a good idea to track these smaller metrics, but keep in mind that there may also be factors outside your control that affect the statistics. Any trends can be used to examine the underlying mechanisms and results of elements inside your process flows that are under your control.
Order Delivery Accuracy
Regarding shipping and logistics, it’s critical to gauge this distribution metric as it lets you know how quickly and successfully you deliver consumers’ orders. Additionally, this metric enables you to keep track of the number of shipments you make without causing harm to the items.
Your order accuracy KPI will provide you with some information that will ultimately help you boost customer satisfaction and loyalty by assessing the quality of your distribution and supply chain. Additionally, it will make it simpler for your clients to tell their friends and coworkers about your company.
Total Order Cycle Time (TOCT)
As business customers have grown to anticipate delivery times similar to those of Amazon, TOCT has become a crucial distribution metric. With TOCT, we track how long it takes to complete a customer order, but it’s also critical to track how long it takes to complete your buy orders with your suppliers. So, in addition to keeping an eye out for any rises in order cycle time, you should evaluate it against rivals.
This distribution metric measures the time delivery agents take to pick up things from the warehouse and deliver them to their final destination. The time it takes to pick up and deliver items after an order is placed is crucial since it determines how quickly your delivery couriers can deliver packages. Therefore, you want your drivers to be able to complete the drops with the least amount of delay to improve your 3PL distribution services.
This distribution metric can also be used to increase the effectiveness of your transportation routes.
Picking and Packing Cost
Everything your business does has a cost, including picking and packing. So take a high-level approach by segmenting elements like labour, assets, and fixed costs. However, as a distributor, you control the variable cost of picking and packing services.
This distribution metric monitors how much your business spends on order lines for handling, labeling, and packing.
Back Order Rate
It is a distribution metric gauges how frequently orders are placed for things not currently in stock. This KPI should ideally be maintained low. Periodic spikes are OK as long as they result from unanticipated demand situations. A persistently high rate, however, suggests inadequate inventory management and/or demand forecasting.
It’s crucial to know how well your warehouse has been utilized. This measure may be based on the number of pallet locations, pick facings, or available cubic feet of storage. Your business can lose money if just half its warehouse space is utilised. Additionally, operating at more than 85% of your capacity, you generally can’t do so effectively (or safely). The idea is to find the utilisation sweet spot or the point at which your warehouse, staff, and processes work best together. Your ERP will assist you in performing that computation, understanding seasonal and cyclical variations, and adjusting for it.
Loss of Sales
A potential client can get a quote and then choose to work with another company. This is a metric that requires monitoring. The data can provide insights that can help your firm make pivots when calculating the percentage of estimations that don’t result in any business being executed. You might need to reevaluate your pricing, level of customer service, or shipment schedules, for instance.
Picking Accuracy This key performance indicator, however, examines a particular procedure. It calculates the proportion of orders that are accurately chosen and packaged.
Utilization of Labor and Equipment
This KPI measures productivity in the distribution sector. It gauges how quickly your staff and machinery are filling orders in your warehouse or distribution facility. A distribution company may suffer significantly financially from having too many unemployed employees and underused equipment.
The Ratio of Inventory Turnover
This lean distribution metric counts the instances during a given time frame when the entire inventory passes through the warehouse. Warehouse and buying managers should keep an eye on this measure as it helps to guarantee that there is always an acceptable quantity of inventory.
Dock to Stock Cycle Time
Stocking Cycle Time gauges how quickly and efficiently inbound logistics teams receive shipments from suppliers and stock them. A high value for this KPI may indicate problems with the number of orders prepared for shipping promptly, the availability of warehouse space for incoming shipments afterwards, and the general flow of items entering and leaving the warehouse. High values for this KPI may indicate that the organisation uses improper inventory management techniques, ineffective shipping scheduling, or poor warehouse space management. A shorter stocking cycle time will contribute to fewer potential issues later in the supply chain, boosting the percentage of on-time shipments and customer satisfaction.
WareIQ As Your Distribution Logistics Partner
As a B2B or B2C brand, you may utilise WareIQ, a 3PL fulfilment service, to outsource all facets of order fulfilment, from inventory management to returns management.
Send your products to one of our fulfilment centres in India, and we’ll streamline your business’s fulfilment and distribution operations.
You may provide same-day and next-day delivery to your consumers using the distribution network of WareIQ. For your company, you can reject RTO (Return To Origin) orders and reduce your fulfilment expenses by up to 40%.
By utilising WareIQ Fulfillment, you can concentrate more on other critical areas of your business and less on internal fulfilment.
By utilising WareIQ’s effective fulfilling strategy, you may improve your eCommerce business and increase revenue.
Here is a summary of how WareIQ encourages the growth of brands through intelligent distribution.
Multiple Fulfillment Centers for Quicker Shipping
WareIQ’s extensive and dynamic fulfilment network allows you to strategically store products across many locations to cut transit times, with fulfilment centres dispersed across tier-1, tier-2, and tier-3 cities.
Bangalore, Chennai, Delhi, Mumbai, Kolkata, Ahmedabad, and Hyderabad are the locations of WareIQ’s fulfilment centres. Thanks to this broad fulfilment network, you may provide same-day delivery for your consumers in your specific areas.
The WareIQ dashboard gathers data from previous orders to help you choose your optimal distribution strategy, allowing merchants to shorten typical delivery times.
Reduced Shipping Costs
You can offer your customers competitive, reasonable delivery options with a good shipping strategy.
In addition to offering expediting shipping services, WareIQ can also help you reduce shipping expenses by offering economical 2-day shipping or even free shipping (with a minimum cart value threshold higher than your average order value).
Top domestic shipping firms and local parcel delivery services are partners of WareIQ. They haggle for bulk shipping discounts, which are then on to you and your clients.
- Pan India Fulfillment & Darkstore Network: Plug-and-play fulfillment infrastructure with no minimums, which is compliant with Amazon Seller Flex, Flipkart Assured, Myntra and other marketplaces
- Inventory & Network Planning Excellence: Best-in-class AI models for sales forecasting, product segmentation, and inventory management to reduce inventory by 40% and increase revenue by 10%.
- Vertically Integrated Fulfillment Tech Stack: Our Fulfillment Tech Solution supports integrations with 20+ top marketplaces & D2C platforms, and prominent national, regional and hyperlocal couriers, enhancing reach by covering deliveries for 27,000+ pin codes
- Supply Chain Productivity Applications: Integrate a host of supply chain productivity apps with a single-click to your existing CRMs, ERPs & accounting software to manage your logistics workflows from one command center. Use Apps like RTO Shield to get 100% RTO protection, Branded Tracking to turn your order tracking page into a profitable marketing channel, and many more.
Trusted by 300+ top Indian brands, we are helping them accelerate online sales and expedite their growth through a synergistic combination of advanced technology, robust fulfillment infrastructure & seller enablement services!WareIQ is backed by leading global investors including Y Combinator, Funders Club, Flexport, Pioneer Fund, Soma Capital, and Emles Venture Partner.