What do you do with all your data? Trying to complete valuable wholesale metrics can seem complicated to many managers, but it doesn’t have to be. Using tools that break down data into easy to digest charts and graphs to give you an understanding of trends and possible areas of issue.
You’ll never succeed at wholesale metrics if...
You don’t acknowledge the importance of your fill rate. Why? Fill rate, or the percentage of total orders that arrive on the first shipment error-free, in full, on time, and undamaged, affects nearly every other metric. Hopefully you already have an idea of your fill rate, but if you don’t look at it as the single most important metric, you have no chance to succeed in improving any of the others.
The effect of fill rate
Fill rate affects nearly every other metric, which is why it is the most important. It essentially defines the likelihood of fulfilling your promises to your customers in a timely fashion, which affects your customer satisfaction and retention, lowering your customer support costs. Fill rate also affects your ship-to-promise metric, or the metric that measures the accuracy and timeliness of your order fulfillment. Additionally, it affects your order-to-cash because often, you won’t receive payment for the order until it’s shipped.
Everyone strives for a fill rate of 100%, but this isn’t always possible because of external and internal factors. Even if you have an exceptional fill rate (around 98%), it’s the 2% that matter, because these give you the key to understanding how to improve your wholesale service.
Fill rate isn’t just about the warehouse
Blaming low fill rates on the warehouses ability to supply the demand is unfair. Everybody in the sales cycle - from the retailer, who may change or alter an order, to the sales rep, who may process orders inaccurately or in an untimely fashion, to the managers overseeing the sales all have an integral role in the overall fill rate. It is only when you are able to see how each player is a part of a whole that you can really spot why your fill rate is falling short.
How to improve your fill rate: Know your inventory
You must have a real-time understanding of your inventory that is available to be shipped so your sales reps can avoid selling out of stock items, orders that will ship late, Additionally, knowing your available inventory allows you to improve customer support by offering options for substitution if a product a retailer wants is not available. It will also help you avoid unnecessary repeats of sales cycles, saving both you and the retailer time. You need to know your inventory turnover rate as well as how accurate your inventory is, and then work toward automizing your inventory as much as possible, based on daily demand or on a scheduled basis. Doing this allows you to see if everything were to come in and out as needed, where there are still discrepancies.
Wholesale metrics is complex, but it really doesn’t need to be complicated. Constantly moving to improve your fill rate to near perfection is the key to succeeding at getting the metrics you want. What’s your opinion? Do you feel fill rate is the most important part of wholesale metrics?