Glossary

This metric represents the total value of confirmed orders that have not yet been fulfilled.

Also known as customer order fill rate and demand satisfaction rate, the order fill rate is an inventory management metric. It is the number of customer orders which are fulfilled immediately (for example, from available stock), expressed as a percentage of the total number of customer orders. It can be measured over any chosen time period.

As a general business metric, for example in an engineer to order environment, the order fulfillment cost is the overall cost of meeting the customer’s order.

To compare alternative logistics providers, a manufacturer will obtain estimates for each provider’s order fulfillment cost. This is the total fee paid to a provider for product storage together with costs to pick, pack and ship an order.

Order fulfillment lead time (also Customer Lead Times) is the elapsed time from the receipt of a customer order until the finished product is received by the customer.

Order-to-Cash Cycle is the time taken from the initial order for goods and services, to the moment the company receives payment from the customer. This metric is used mainly by manufacturers with a traditional process flow in which they must pay for materials and make/deliver a product before they can send an invoice.

In some environments, this metric is widely used, for example, in consumer online and in-store sales. In these environments, the consumer customer pays when or even before goods are made or delivered. Many retail cash flow models assume they can be paid before they have to pay suppliers.

Order-to-Delivery Leadtime is the time from when a specific customer order is received by the plant until product is delivered to customer, including any warehousing, cross-docking and transportation time.

Order-to-Shipment Leadtime is the time from when a specific order is released to the shop floor until that order is shipped to the customer, including any storage time in finished goods inventory.