Order cycle time

Lead time is also affected by order cycle time, which includes the time it takes to transmit the order to the supplier, process the order, assemble the material, and transport them to the customer (1). Time between order and delivery may be affected by a number of factors. 

New offering will not significantly impact coffee order cycle times. 

What is your average order cycle time ... 

The most important measure of customer service is inventory avaUabUity within a specified order cycle time. A common measure of availability is the number of orders shipped complete within a specified time period as a percentage of total orders received. The measure(s) selected should reflect the customer s view of customer service. The best measure of customer service reflects the product s importance to the customer and the customer s importance to the company. 

The order cycle is the time that elapses between the customer s order placement and the time the product is received. The ability to achieve the targeted order cycle time consistently influences the amount of inventory held throughout the supply chain. Consequently, the speed and consistency of the order cycle are prime factors in supply chain design. Most customers prefer consistent service to fast service because the former allows them to plan inventory levels to a greater extent than is possible with a fast but highly variable order cycle. 

For example, a manufacturer whose product availability is poor and order cycle times inconsistent may force wholesalers to carry more inventory as safety stock in order to offer an acceptable level of service to the retailers. In this case, lower logistics costs for the manufacturer were achieved at the expense of other members of the supply chain, and the entire supply chain may be less efficient. 

Supply Chain Type Demand Latency from Shelf to Order Order Cycle Time Manufacturing Cycle... 

Cash and receivables Order cycle time Order completion rate Invoice accuracy Order shipment performance Receivable/credits caused by system malfunction... 

The goal of an APS is to cut order cycle times and reduce inventories while increasing capacity use and throughput. It is essential that the APS have fast access to all available information to be able to accomplish this. 

Stock turn Planned versus actual —> Assets turn Order cycle time —> Order fill On-time delivery —> Invoice accuracy Returns... 

Order cycle time (also known as lead time) is the elapsed time from the placement of an order by the customer to the receiving of dehvery (see Figure 7.6). It is important to state standards to suit customer requirements and analyse the total cycle time into relevant components. Lynch and Cross (1991) claim that only 5 per cent of cycle time is devoted to adding value. In many cases the product is waiting to be worked on 95 per cent of the time. (This excludes raw materials in stock and finished goods in the warehouse.)... 

Order fill is the percentage of first time satisfied orders. From the customer s point of view this is probably the most important measurement The order is the correct quantity and quality. The next most important measure as far as the customer is concerned is if the delivery is on time On time delivery can be expressed as a percentage of full orders delivered on time. On time may be determined by the standards of order cycle time set for a customer or the agreed date of delivery as set by the customer. 

Purchase order cycle time was reduced by 50%. Automation of purchase orders went to 70% of the total. 

Order cycle time for material flow De TrevUle et al.. 

It has been suggested that the role of customer service Is to provide time and place utility In the transfer of goods and services between buyer and seller. Put another way, there Is no value In the product or service until It Is In the hands of the customer or consumer. It follows that making the product or service available Is what, In essence, the distribution function of the business Is all about. Availability Is In Itself a complex concept. Impacted upon by a galaxy of factors which together constitute customer service. These factors might Include delivery frequency and reliability, stock levels and order cycle time, for example. Indeed It could be said that ultimately customer service Is determined by the Interaction of all those factors that affect the process of making products and services available to the buyer. 

Order cycle time Order completion rate Invoice accuracy... 

This component of current assets is crucial to the liquidity of the business. In recent years its importance has been recognised as more companies become squeezed for cash. It is not always recognised, however, that logistics variables have a direct impact on this part of the balance sheet. For example, the shorter the order cycle time, from when the customer places the order to when the goods are delivered, the sooner the invoice can be issued. Likewise the order completion rate can affect the cash flow if the invoice is not issued until after all the goods are despatched. One of the less obvious logistics variables affecting cash and receivables is invoice accuracy. A customer who receives an inaccurate invoice is unlikely to pay and the payment lead time will be extended until the problem is rectified. 

In a sense, the information we receive, if we only have the order to rely on, is like the tip of an iceberg. Only a small proportion of the total iceberg is visible above the surface. Likewise the order cycle time (i.e. the required response time from order to delivery) may only be the visible tip of the information iceberg (see Figure 4.5). 

From a marketing point of view the time taken from receipt of a customer s order through to delivery (sometimes referred to as order cycle time (OCT)) is critical. In today s just-in-time environment short lead times are a major source of competitive advantage. Equally important, however, is the reliability or consistency of that lead time. It can actually be argued that reliability of delivery is more important than the length of the order cycle - at least up to a point - because the impact of a failure to deliver on time is more severe than the need to order further in advance. Flowever, because, as we have seen, long lead times require longer-term forecasts, then the pressure from the customer will continue to be for deliveries to be made in ever shorter time-frames. 

The effect that such groups can have is often dramatic. Because all the key people in the order fulfilment process are brought together and linked around a common entity - the order - they are better able to sort out problems and eliminate bottlenecks. Order cycle times can be dramatically reduced as teamwork prevails over interdepartmental rivalry. New ways of dealing with problems emerge, more non-value-added activities are eliminated and customer service problems - when they arise - can quickly be resolved, since all the key people are in close connection with each other. 

Lead time Total order cycle time occurring from the arrival of a customer order to the receipt of goods or cycle time of the single activities (order transmission, order processing, order composition, order transfer to the production plant, article production, warehouse delivery, final delivery to the customer) Response time, to order tracking requests, etc. 

---