6 order management KPIs you should be measuring 

Order management is the unsung hero of your business that ensures every order goes off without a hitch. 

What is order management performance? 

It’s the key driver of your eCommerce engine. It measures how well you’re managing the entire order life cycle, from when a customer clicks "buy" to when they get their package. 

Why do you need to measure order management KPIs? 

Unlike many technical reports you might rely on right now, tracking order management KPIs helps you uncover your process superpowers by honing in on the important (and often hidden) details.  

These key metrics light the way for what's going well (or not so well), allowing you to remove bottlenecks, cut costs, and make customers happy. Without them, you're flying blind, risking late deliveries and cranky customers posting about their bad experience.  

The following KPIs for order management are the secret sauce that can turn chaos into a smooth, customer-satisfying strategy: 

Average order value (AOV) 

Formula: Total Revenue ÷ Total Number of Orders 

Average order value refers to how much a customer, on average, spends per order. That is, after all, what defines their buying habits. 

AOV levels can be tracked over time (e.g. monthly, quarterly) on your eCommerce platform or in Google Analytics and Shopify. 

The average order value KPI can drive your income without you having to focus on increasing the number of clients. A higher AOV will show you where your opportunities for upsell lie. 

You can also consider product bundles to grow profits quickly with the products you already have in stock, for a customer who’s highly interested in them.  

If AOV is low, then maybe your customers are only buying one or two low-value items. In this case, you need to look closer at your pricing strategy and make the appropriate adjustments.  

To increase AOV, try product bundling or setting a threshold (like “Spend £60 and get free shipping”). Another option is to launch a loyalty or rewards program so that customers who spend more will be given the chance to purchase more products at exclusive deals or with special bonuses like freebies. 

Order picking accuracy 

Formula: (Number of Orders Picked Accurately ÷ Total Orders Picked) × 100 

Improving order picking accuracy means you can deliver exactly what your customers ordered without unwanted surprises.  

The Fulfilment Experts (TFE) now have a picking accuracy close to 100% after using Mintsoft’s barcode scanning tools. Radius Warehouse and Logistics Services also announced that they have achieved picking accuracy above 99.6% since turning to Mintsoft and even hit 100% during one quarter. 

With a warehouse management software like Mintsoft, you’ll get access to the native mobile picking app that ensures every pick is verified through real-time barcode scanning. TFE uses it to maintain near to 100% accuracy by ensuring barcodes on products and labelling are correctly set up. 

You can then monitor performance using Mintsoft’s KPI reports at any interval. Optimising batching, to speeding up picking, to reducing the walking distance, all of these can help to improve accuracy through simplified operations. 

Order picking accuracy has been called the key sauce for customer satisfaction and operational efficiency. On the subsequent growth, TFE’s Laszlo Nortje commented: 
 
“Mintsoft has been a massive key factor in our success and our growth. In three years, we've grown 300%.” 

Cost per order 

Formula: Total Order Processing Costs ÷ Total Number of Orders 

Cost per order (CPO) shows the average cost to process and complete an order. This includes labour, packaging, shipping and overheads. Think of it like a financial detective, helping you get to the end number to see what you spend on getting each package out the front door.  

CK Fulfilment was able to reduce its CPO by 71% using Mintsoft. This gave them the means to grow from one client to 29 while also growing their revenue by 287% year over year. 

You can improve your own cost per order starting with the data you already have. CK Fulfilment was able to dive into the data with Mintsoft's reporting suite. The tool gave them a deep understanding of the costs associated with their fulfilment process, and provided the opportunity to introduce a more efficient process that allowed them to improve their CPO. 

Mintsoft further allowed CK Fulfilment to get back its time by reducing manual tasks. This lowered the overall labour costs for the business through automation, such as a scan-to-dispatch process and order management.  

On-time, In-full (OTIF) 

Formula: (Number of Orders Delivered On-Time and In-Full ÷ Total Orders) × 100 

You can also optimise supply chain fulfilment with the OTIF KPI for order management. This is expressed as the percentage of orders delivered on time and in full, including all ordered items. 

Tony Barnes of CK Fulfilment credits Mintsoft’s barcode scanning functionality for scan verification at all points of the process. For them, this guaranteed their orders were complete and accurate, clearly helping with OTIF.  

Alongside this, CK Fulfilment used Mintsoft to assess warehouse productivity and really see where their costs were going. 

Time to dispatch 

Formula: Average (Dispatch Date/Time – Order Placement Date/Time) 

Time to dispatch is a key measurement of your total order cycle time that calculates the average time from an order being placed to when the order leaves the warehouse. The sooner a package is dispatched, the sooner your customers receive their goods.  

This also takes off some burden from your customer service team as fewer customers will ask, "Where’s my order?". In simple terms, time to dispatch is your way of making customers happy and making space in your warehouse to fit more orders. 

CK Fulfilment, for instance, uses Mintsoft to automate order management, reducing manual tasks and speeding up dispatch. This helped grow CK Fulfilment's order output by a whopping 445%. 

But besides automation, the team ensured the right staffing, the right training by working with Mintsoft. Proper tool training ensured that staff were quick in using their new order management tool and no accidents happened. 

Rate of returns 

Formula: (Number of Returned Orders ÷ Total Orders) × 100 

The rate of returns order management KPI measures the percentage of orders that customers return to you that are sent back because of errors, defects, or dissatisfaction with your product or service. It's a KPI you can rely on primarily to help you spot and fix concerns in your fulfilment process before they escalate.  

A high rate of return indicates that something is wrong. This most likely stems from errors in either the pick process (incorrect item shipped) or inferior products. Both cost you customer trust (a major downfall for eCommerce) and money.

A low return rate indicates the operation is running tight, building customer loyalty, and advancing your margins. It’s also a good order management metric you can use for spotting trends like recurring defects, customer satisfaction levels, order accuracy, seasonal return patterns, and more. 

You can use warehouse management systems and their integrated barcode scanners to check items during the picking and packing processes. This will dramatically reduce the errors that could lead to returns of incorrect items.  

A warehouse management tool also lets you automate workflows to reduce the likelihood of errors, such as shipping the wrong product, mislabeling packages, or dispatching orders to incorrect addresses. 

Reporting capabilities are a must at this stage since you want to record the reasons for returning items to avoid future unnecessary expenses. 

Order management KPI dashboards help you visualise warehouse performance instead of just reading numbers. They do so by relying on easily digestible data views that display critical measures in real-time. This way, you’ll get faster insights that also lead to faster decisions.  

These dashboards aggregate plenty of information about errors, such as sending the wrong products, mislabeled packages, or incorrect delivery addresses. Graphs, heatmaps, and trend lines show you patterns of common errors and bottlenecks. Add in customisable filters to zero in on particular metrics, such as error frequency by product or location.  

Mintsoft’s order management KPI dashboards offer a holistic overview of your warehouse performance, supporting data-backed decision making.  

For instance, you can use it for tracking key metrics like the number of orders received, the number of orders processed, the total available stock, the total cubic meters used by stock, ASN accuracy, orders received by date, and unpickable stock by status. 

Mintsoft's cloud-based warehouse management system allows you to track your order management KPIs instantly, so you get visibility into your operations in real time. 

Its dashboards simplify tracking KPIs like order picking accuracy and cost per order. You can then automatically report on these KPIs, use barcode scanning for perfect accuracy, and pull in data from more than 150 integrations (e.g. marketplaces like Shopify and Amazon) to keep all data in sync across platforms.  

The platform also comes with robust reporting options with strong customisation options. If you’re a 3PL, you can set up specific dashboards for clients to review profitability and performance.  

Get a free Mintsoft demo to see how we can change your KPI reporting to improve your entire order management process, not just parts of it.