Published October 21, 2016
By Bruce Tompkins
Partner, Tompkins International
Processing time for eCommerce orders is very important to consumers and the overall success of the provider. Data from Tompkins International’s eCommerce survey indicates that over half of survey respondents process orders in under 24 hours. Also, processing times longer than 48 hours was only 5% of survey responses. Speed is a key variable in consumers’ minds today and satisfying them is critical.
The peaks and valleys of demand greatly impact company order processing time. Small peaks of 0-5% have an impact on processing times but, as the extent of peak increases, so to does the processing time. Companies operating combined DCs/FCs generally handle peaks slightly better by utilizing resources between distribution and fulfillment.
Another interesting fact from the survey was, orders average approximately 2.5 pieces. The maximum order size was 7.0 pieces for surveyed companies. Fulfilling orders from a single fulfillment center were also important. The conclusion reached was, the average company filled 92% from a single FC.
The productivity of fulfillment operations tends to be a function of the level of automation and industry, therefore product characteristics. Roughly 60% of company responses indicate 35 units are processed per hour or less with 22% exceeding 100 units per hour.
Productivity in terms of processing cost per unit also varies greatly with top quartile (top 25%) at $.60 per unit and the average at $1.45 per unit. Once again, automation and industry are the controlling variables.
Processing time/speed is becoming a critical measure in eCommerce as consumer expectations evolve. Companies participating in the survey also pointed to productivity as a key component of success for providers. Any eCommerce company that is not working on processing time and productivity will find it harder and harder to remain competitive.