Perfect Order Measurement: As with most other Supply Chain Metrics, there are
many variations to this measurement.
The Perfect Order Measure calculates the error-free rate of each stage of a Purchase
Order. This measure should capture every step in the life of an order. It measures the
errors per order line.
But how do you capture errors? Let's look at what happens when an error occurs. Say
for example, your warehouse picks and ships the wrong item. Once the customer receives the
order and notices the error, they contact the manufacturer and notify them of the mistake.
The manufacturer then enters a credit for the item not shipped and an invoice for the item
shipped in its place. For almost all errors that occur, a corrective credit is issued. It
is through an analysis of these credits that you derive your metric. Most systems require
a "reason code" to be used when entering a credit. Tracking these reason codes
and assigning them to a category allow you to group them for the Perfect Order Measure.
Example:
Order Entry Accuracy: 99.95% Correct (5 errors per 10,000 order lines)
Warehouse Pick Accuracy: 99.2%
Delivered on Time: 96%
Shipped without Damage: 99%
Invoiced Correctly: 99.8%
Therefore, the Perfect Order Measure is 99.95% * 99.2% * 96% * 99% * 99.8% =
94.04%
There may be other fields used such as "The Sales Representative recommending the
correct item" or the "FillRate".
