Measure and Evaluate Customer Order Management Processes

The following provide some simple ideas on measures that can be used to assess COM processes:

• DIFOTIS: a measure of the % of the product or service that is delivered to customers in-full, on-time, and in-spec. DIFOTIS is commonly used measure that is often used to compare, or benchmark, against competitors or organisations with comparable issues or requirements.

• Returns rate: This is a measure of the %, or number, of customer returned products (quantity or value). The returns rate is a measure of satisfaction/reliability of the product or service.

• Orders – Schedule: e.g. % orders that are scheduled for delivery in the same week as customer requested. This measure provides an input for use in analysis of production planning processes and provides an indication of customer focus.

• Orders – Backlog: e.g. the number of complete orders not yet scheduled, or % of complete orders not yet scheduled. This measure provides an indication of how closely sales orders have been aligned to existing production schedules and/or production capacity.

• Lead time - Service provider: e.g. Time period taken from customer order for service to when service is provided and fully functional (may be measured in minutes, hours, days, weeks). This is a measure of service provider related lead-time. This measure represents overall lead time from customer order to completion of order.

• Lead time - Product delivery: e.g. Elapsed time from receipt of customer order to product and / or service completion / delivery. A measure of lead-time that is appropriate to organisations whose final product typically includes design and other services in addition to the tangible end product (e.g. construction projects).

• 24-hour service e.g.: % of orders that are both received and despatched to the customer within the same 24 hour period. This measure provides an indication of how many orders are shipped within 24 hours, an issue that is frequently a key factor in satisfying customers. The appropriateness of this measure relies upon the nature of the product or service.

• Customer complaints – Number: e.g. The number of customer complaints over a period of time; or the number of customer complaints per number of million units sold or shipped; or, the number of customer complaints divided by total number of orders. This measure gauges customer complaints as a proportion of units sold or orders taken.

• Packaging accuracy: e.g. orders delivered with right mix and quantity as a % of total orders delivered A measure of order or packaging accuracy.

• Product/service quality: e.g. the number of orders not meeting agreed product or service specification as a % of total no. of orders. This is a measure that indicates the effectiveness of the quality system.

• Customer - Order entry error: e.g. Error free order entries as a % of total orders per period, or the % of orders requiring amendment as a percentage of the total orders per period. This data is a measure of order entry errors. Note: this measure may be more useful when categorised into two types of errors i.e.:
• Errors that directly affect customer satisfaction and
• Errors that do not affect customer satisfaction and would not be noticed in delivered products or services.