The total order cycle time is an important KPI for everywhere warehouse around the globe. It affects everything in your fulfillment cycle, from how fast your customers get their orders to your average daily order volume.
So, it’s best that you take a look at your operations and figure out which you can improve to speed up your total order cycle time. In this blog, we’ll explain what total order cycle time is, how you can measure it, and the 7 important things that you can do to improve it.
What Is Total Order Cycle Time?
The total order cycle time is the average amount of time it takes you to fulfill an order, and it comprises these 4 steps of a fulfillment operation:
- Receiving the order
- Shipping (excluding shipping time)
It’s important to note that this metric only looks at orders that were successfully completed—not canceled or returned orders.
This KPI is important because it encompasses everything in your fulfillment cycle, from how fast your customers get their orders to your average daily order volume. A shorter total order cycle time means that customers are receiving their orders faster, which is always a good thing.
Conversely, a longer total order cycle time means that there are bottlenecks in your fulfillment operation, which can lead to unhappy customers and lost sales.
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How to Calculate Total Order Cycle Time
The math that goes into calculating your total order cycle time is quite simple:
If the results you get are not up to your satisfaction, we’re here to help! We’ve prepared the 7 best ways that many order fulfillment operations can improve their total order cycle time.
7 Ways to Improve Total Order Cycle Time
Now that we’ve explained what the total order cycle time is and shared how to calculate total order cycle time, let’s take a look at the seven ways you can improve it.
1. Automate your picking processes
One of the biggest bottlenecks in any fulfillment operation is the picking process. This is where goods-to-person robots come in handy; they can automate most of the picking process for you.
By automating this process, you eliminate the walking time, which is normally 50% of the entire picking process, freeing up your employees to do other tasks and improving your overall efficiency.
50% faster operations are not the only benefits of goods-to-person robots—they also provide 300% increased workforce efficiency, 99.99% order picking accuracy, and many more!
2. Leverage order forecasting
Warehouse managers can leverage order forecasting to improve their total order cycle time. Order forecasting is the process of predicting future orders and creating a plan to meet those orders. This can be done in a number of ways, such as using historical data to predict future sales or using customer trends to anticipate changes in demand.
By using order forecasting, warehouse managers can prepare for increases and decreases in demand and create a plan to meet those demands. This will help improve their total order cycle time by ensuring that they have the necessary resources in place to meet customer demand.
3. Use Barcodes or RFID Tags
Do you know how easy it is to cook in a kitchen where all cans and containers have labels on them? Same goes for your warehouse!
To have flawless order cycles, you need to have a system in which each product has a tag, or in this case, Barcodes and RFID tags. These will help you keep track of inventory levels so you know exactly what needs to be restocked and when items need to be replenished.
Doing so will also help speed up your picking process and, thus, total order cycle time, whether automated or not, and increase order accuracy. That’s what we call a win-win situation!
4. Use a solid Warehouse Management System (WMS)
Warehouse managers can use a solid warehouse management system (WMS) to speed up the total order cycle. A WMS is a system that helps manage and optimize warehouse operations.
It can help with tasks such as inventory management, order tracking, and shipping and help you keep track of the entire order cycle to help identify and fix any bottlenecks that may be causing delays.
A WMS can also:
- help reduce the amount of time it takes to process orders,
- help improve the accuracy of orders, and
- help with forecasting future demand.
By using a WMS, warehouse managers can speed up their total order cycle time and improve their warehouse operations.
5. Implement automation in your warehouse
With goods-to-person robots being the first and foremost, there are many different types of automation that can be used in warehouses these days, from conveyor belts to robotics. And the sooner you’ll invest in them, the more you’ll experience their first-mover advantages!
Implementing such automation can reduce errors, increase productivity, and, ultimately, fulfill orders faster, which will directly improve your total order cycle time.
If you’re looking to deploy warehouse automation, goods-to-person robots are a good start!
6. Implement best-practice picking and putaway zones
Investing in goods-to-person and other types of fulfillment robots is the best way to go when you’re looking to optimize any KPI regarding your warehouse.
However, if you don’t have the budget for it (yet), the best next thing would be to optimize your manual process, meaning implementing picking and putaway zones.
Wave Picking and Zone Picking are the best-known picking processes you can utilize, and Putaway Zones are just one of the best ways to survive in all the chaos.
Zone picking is a method of organizing your warehouse into different sections or zones. Each zone contains items that are frequently ordered together. When an order comes in, the picker will go to the appropriate zone and pick all of the items for that order before moving on to the next zone.
This method saves time because the picker doesn’t have to walk back and forth across the warehouse to retrieve all of the items for an order.
Wave picking is grouping orders together based on when they were placed. This allows you to pick all of the orders for a certain period of time (usually one hour) before moving on to the next batch.
Again, this saves time because you do not have to go back and forth across the warehouse constantly.
The Putaway Zone is a designated area in your warehouse where each type of product is stored after it’s been picked. This helps reduce confusion among pickers and ensures that items are put back in their correct place after they’ve been retrieved for an order.
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7. Review & adjust as needed
Once you’ve implemented some or all of these strategies, it’s important to review your total order cycle time periodically and make adjustments as needed. What works today may not work tomorrow as your business grows and changes, so it’s important to be flexible and adaptable in your approach.
By regularly reviewing your total order cycle time and making improvements as needed, you can ensure that your operation is as efficient as possible.
All in all…
To improve total order cycle time has a number of benefits—it makes your customers happy by getting their orders to them faster, and it increases your throughput by ensuring you handle more in less time. So, it’s definitely something worth spending some time on!
And luckily, most of these improvements can be made swiftly with the help of technology, such as warehouse software and goods-to-person robots!
If you’re looking for more information on how these robots can help you streamline your operations, contact us today!