Order fulfillment cycle time: what it is and how to improve it

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Learn how order fulfillment cycle time impacts customer satisfaction. Reducing cycle time results in faster delivery and happier customers.

Here's how to optimize your order fulfillment time to keep your customers coming back.

What is the order lead time?
Fulfilment time measures how long it takes for algeria b2b leads customers to receive their purchases. The shorter the fulfilment time, the better the customer experience. You can reduce this time by optimising your supply chain and choosing reliable delivery partners.

The order fulfillment process depends on your inventory, the efficiency of your supply chain, and the location of both you and your customer. For online shoppers, the closer the delivery date is to the order date, the better the service.

How to calculate order fulfillment time
Lead times vary by company and product, but you can use a simple formula to determine the average delivery time. To calculate lead time, you need to track three key steps:

Supplier search time is the time between the customer receiving the order and collecting all the necessary materials. If you have the product in stock, there is no time to search.
Production time, also called packaging time, includes receiving the goods, checking the quality, and packing for shipping.
Delivery time starts from the moment packaging is completed and ends when the product is delivered to the customer.
Order fulfillment cycle time formula
Add all the factors together to get the order lead time:

Sourcing time + production time + delivery time = Order Fulfilment Cycle Time (OFCT).

Keep in mind that order fulfillment time is different from cash cycle time, which measures how long it takes to transfer inventory, receive payment, and pay suppliers. When managing fulfillment, closely monitor your supply chain KPIs to identify delays and improve the process.



Benefits of Accelerating the Order Fulfillment Cycle
While execution models vary by business, faster execution times offer several key benefits across all industries.

Increases brand loyalty
Fast delivery encourages customers to return, leave positive reviews, and recommend the brand to others. When you deliver on time, customers choose you over competitors, whether they buy directly from your store or from marketplaces.

Strengthens customer trust
Delivering on delivery promises builds trust in the brand. Reliable delivery builds trust.

Attracts new clients
Fast order fulfillment attracts new customers through positive reviews and word of mouth. It also helps with customer retention, turning first-time buyers into repeat customers by providing them with a great experience from the start.

Improves overall performance
High-quality order fulfillment is often an indication of the strength of a business. When order fulfillment runs smoothly, it usually means you have robust ordering systems, supply chain management, and warehouse processes in place.

Factors Affecting Order Fulfillment Cycle Time
Inventory management
Having products in stock is critical to quickly fulfilling orders. By using effective inventory rotation techniques, you can protect your inventory from becoming obsolete or unsellable, which is especially important for products with expired dates.

Warehouse organization
Product placement affects order fulfillment speed. Place best-selling items near packing stations to reduce picking time. Consider organizing inventory by category so your team can find items quickly. Voice-activated picking systems can speed up the process even more by allowing employees to handle items hands-free.

Delivery partners
While packages are in transit, you remain responsible for them. Balance speed and cost by offering tiered shipping options.

Tiered shipping allows you to meet different customer needs. Customers willing to pay extra for speed can offset the cost of faster shipping.

Order processing technology
The faster and more accurately you process orders, the shorter your turnaround times. Good order processing technology automates key steps in the fulfillment process, such as:

Data accuracy
Small errors can cause big delays. When customers enter incorrect shipping information, carriers are unable to deliver their packages. These errors often occur at the final stage of delivery, forcing a restart of the process and doubling delivery times.

Ways to Reduce Order Fulfillment Time
Here are strategies to help reduce delivery times:

Track and analyze metrics
Monitor order fulfillment performance by tracking on-time deliveries, undamaged packages, and correct purchase orders. Document every step of the process, including supply chain cycle times, to identify bottlenecks that slow down delivery.

Use reliable suppliers
If you manufacture or assemble products, choose reliable suppliers to avoid disruptions. Late deliveries of materials affect turnaround times, so consider using multiple sources for each material.

Consider local and global material options
While sourcing products overseas is often cheaper than sourcing them in the U.S., local suppliers can provide more reliable delivery times. This is especially valuable when international shipping is disrupted by geopolitical events, weather conditions, or emergencies.

Optimize your warehouse layout
A well-organized warehouse helps your team work efficiently. Create clear paths to shelves and bins, make room for service vehicles, and distribute inventory across multiple warehouses if you handle large volumes.

Keep your inventory up to date
Track inventory in real time to provide customers with accurate stock levels and realistic delivery times.



Impact on business performance
Your post-purchase experience is as important as the shopping experience itself. Research shows that 40% of shoppers avoid brands due to poor delivery results. Meeting delivery expectations directly impacts customer retention and satisfaction.

While external factors such as natural disasters or labor shortages can impact delivery times, smart planning can help mitigate risks. For example, having multiple carriers allows you to deliver on delivery promises during peak seasons when some carriers are overloaded.

Fast and reliable delivery encourages word of mouth. Conversely, failure to deliver on delivery promises can lead to negative reviews, especially if customers paid extra for expedited shipping that was not delivered.