AMR Research reports that every 3% increase in Effective Order Fill rate results in a 1% boost to profit margins. According to their findings, every 5% increase in Effective Order Fill rate increases ROA by at least 2.5% due to:
| • 1%-5% production efficiency gain • 7%-12% personnel productivity increase • 7%-15% cutback in inventory needed • 5%-15% decrease in expedited freight |
• 3%-10% fewer stock-outs • 10%-30% faster cash-to-cash cycle time • 30%-50% less re-work • 35%-50% less waste and obsolescence |
Harder to quantify—but no less important—are increases in customer satisfaction due to more complete, on-time orders, and improved relations with suppliers resulting from greater communication and fewer emergency requests.
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