Ara Surenian posted on October 15, 2008 14:59
The Manufacturing Enterprise Solutions Association International, the Order Fulfillment Council and the Supply Chain Execution Systems & Technologies Group, and the Warehousing Education and Research Council teamed up to create a set of metrics for gaging the execution performance in both production plants and warehouses.
One metric they established is called the perfect order index. It is a compilation score which measures the result of each of the four major components of a perfect order:
- delivered on-time (the percentage of orders that arrive at their final destination at the agreed upon time between the customer and the shipper);
- shipped complete (the percentage of orders shipped with all lines and units);
- shipped damage free (the percentage of customer orders shipped in good and usable condition);
- correct documentation (the percentage of total orders for which the customer received an accurate invoice and other required documents).
The perfect order index is calculated by multiplying each component to one another. For example, if a company has a 95% score for each of the four components the perfect order index would be 81.4%.