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Omnichannel Supply Chain Metrics: What Should Supply Chain Leaders Measure?

Omnichannel Supply Chain Metrics

There is no easy way to say it; single-channel retail is dead.

Customers want the flexibility of shopping online, over the phone, via apps, social media and in-person. The transition between each of these channels should be seamless, and all channels should work together to create a single, continuing experience to customers. But, how do supply chain leaders and managers ensure their omnichannel supply chain is working. In other words, how do they know it is profitable? The answer lies using these omnichannel supply chain metrics to carefully track and improve operations continuously.

Inventory Accuracy

This is a simple key performance indicator (KPI), another name for metrics, to track. It refers to the in-stock or out-of-stock accuracy of supplier inventory. This KPI should be as high as possible, reflecting accurate inventory available for customers from suppliers.

Vendor Fill Rate

The Fill Rate is a complex metric that considers the average window of delivery, percent of on-time delivery and accuracy of delivery for all products coming into your warehouse from vendors. If vendors fall behind on this metric, you may need to re-evaluate your partnerships or expand your list of approved vendors. When considering the timeliness of a shipment in this KPI, you can derive an order completion metric.

Order Accuracy

During picking, all orders should be accurate. Anytime an order is incorrectly picked and identified prior to shipping, it should be documented and tracked. In addition, returns for inaccurate orders should also be tracked to determine your team’s level of order accuracy.

Order Percent and Cost Per Order Filled per Channel

Rather than referring to each channel when speaking about the omnichannel supply chain, it is easier to think of each channel as segmenting your inventory, explains Ben Ames of DC Velocity. You have an online segment, a pickup in store segment and a direct order segment and more. Therefore, you should track the percent of the actual use of all segments in the omnichannel supply chain. This gives you a better understanding of where to increase or decrease operations to manage and maintain omnichannel operations.

Product Cycle Time

In any warehouse, tracking the product cycle time is essential to managing inventory. However, the importance of this KPI cannot be overstated when considering omnichannel supply chains. Essentially, an omnichannel supply chain must have more products available in shorter delivery windows across larger distances. This KPI should also be broken down into additional KPIs for each respective channel’s unitization, as explained previously.

Forecasting Accuracy KPIs

Marketing is critical to managing inventory and optimizing product cycles. Information gathered through various marketing streams, including data analytics, should be leveraged to create demand forecasts that adapt to changes in the market. For example, trends on social media might indicate a possible shift in demand, generating a new forecast. In the omnichannel supply chain, all forecasts should be monitored and tracked for accuracy and precision.

Other Critical OmniChannel Supply Chain Metrics to Track

The omnichannel supply chain can devour profits when not properly managed, so all systems should connect and generate appropriate metrics, reports Supply & Demand Chain Executive. For example, payments and bills should be verified for accuracy and authorization. Furthermore, your system should monitor new customer acquisition costs, repeat purchase rates, costs of managing issues after a sale and the number of employees dedicated to omnichannel operations.

What Else?

There are dozens of other KPIs that your organization can track to improve efficiency in your omnichannel supply chain. However, all KPIs and metrics should be measured and monitored automatically, and if possible, you should consider working with a third-party integrator (3PI), like Veridian Solutions, to help manage omnichannel supply chain metrics. By understanding and leveraging these KPIs, you can have your proverbial cake and eat it too.

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Jason Rosing

Jason Rosing

Co-Founding Partner & WMOS / EOM Subject Matter Expert at Veridian
Founding partner of Veridian; a valued Manhattan Associates partner and technology leader specializing in user-friendly, robust and flexible automated testing and configuration management solutions designed to meet the ever-changing challenges of the omni-channel landscape.
Jason Rosing
Jason Rosing
  • Stuart Rosenberg

    Don’t mean to be contrary. The suggested metrics in the post to determine supply chain performance have been used in manufacturing and distribution for a number of years. Giving them a new name – omnichannel supply chain metrics – does not change their usefulness. Why does everyone feel the need to re-invent the wheel and give ‘new’ names to analytics that have been in use for decades.

    • Hi Stuart. I think that is a great question. It may make sense to call them what they’ve always been. Perhaps the key point is that even in the switch to omnichannel the fundamental metrics still matter. That’s my perspective.


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