Overview Key Performance Indicators (KPIs) measure how well the processes are performing, using metrics that are usually benchmarked against an industry standard or leader in that space. Efficient Con-sumer Response or ECR for the CPG industry (see www.globalscorecard.net) is an example. The motivation to track these KPIs could either be internal (a supplier's intent to remain compet- itive) or external (mandated by a customer, who wishes to hold suppliers to account by measuring a group of suppliers on same KPIs). s This chapter gives a summary of typical KPIs for the LTC processes.Key Metrics Leads by Campaign: This is a measure of the effectiveness of the campaigns that were run to generate the leads. Actual calculation depends on the type of campaign. For example, the effec- tiveness of a click-ad campaign can be measured using clicks (or dollars spent) vs leads generated. Lead Conversion Rate: This KPI measures how many of the leads generated were turned into cus- tomers who placed orders. Bax Popol» Ueatan 1H or 6“Average Sales from Converted Lead: This is a measure of orders generated from the leads who were converted to customers. This could throw light on the kind of leads to target for higher rev- enue in the future. Orders By Channel: This measures the number or value of orders taken (absolute and as a percent- age of total) by each of the order capture channels (contact centre, EDI, web, and field sales). This measure, for example, can be used to divert re- sources to profitable channels or move customers toaless costly channel. TAH Page AD» Cocten WSF TOSContact Centre Measures: These are measures normally used in contact centre environments and can be extended to order management. Exam- ples include measures like: ~ average handling time (time per order by each agent) ~- average wait time (time the customer had to wait before being able to place the order) Order Accuracy: This measures the number of “problem orders” (that required a manual inter- Teaten einer aejoo vention or resulted in handling by multiple staff), as a percentage of total orders. A more granular measure would analyse reasons or types of problems (e.g. credit hold or obsolete product) as a percentage of total problems. The purpose of both of these measures is to move s towards minimising problem orders and double handling. DIFOT: Is a very popular and critical measure from the customer service point of view for the OTC area; it stands for Delivered In Full and On 9% Page De» LoTime. This is measured at different levels by different organisations. Typical measure is Orders Delivered On Time as a percentage of Total Orders. Amore lenient measure is Order Lines (or quan- tity) on Time as a percentage of Total Lines (or Quantity). “On Time" refers to meeting the agreed requested delivery date and time of the customer. Actual delivery time is either measured directly (POD scan time, for example) or approximate (assumed. arrival time based on dispatch time from supplier warehouse). Pipe 1a» UecaegnThe focus of this measure internally for a supplier isto increase the DIFOT percentage (hence cus- tomer satisfaction) for all customers. Externally, a customer can measure and benchmark supplier performance across all suppliers. Out-of-stock Lines: This is a measure of percent- age of order lines that were out-of-stock at the time of order capture and is partly a consequence (and measure) of demand and supply planning accuracy. Forecast Accuracy or Forecast Error: Though not a direct OTC measure, the sales orders feed ocaion WDot Tehnrrnon into forecasting processes and systems and the order history is a key component of measuring the accuracy of forecast. A simple measure for forecast error'is (Actual Order Qty - Forecast Order Qty) / Actual Order Qty x 100, Other measures include Mean Forecast Error and Mean Absolute Deviation, Delivery Cycle Time: Average time from cus- tomer order to delivery of goods at customer location. This measures the responsiveness of the supplier organisation to customer's demand and could be quite critical in replenishment of shelves ina supplier-retailer scenario.Invoice Accuracy:An accurate invoice is key to getting the payment in time for the sale made. ‘An incorrect invoice results in delayed payments, waste of time in dispute resolution for both cus- tomer and supplier, and in extreme cases, loss of the customer's business. Invoice accuracy mea- sures the number of invoices that had a defect (e.g. wrong discount) over the total invoices in a given period, Days Sales Outstanding (DSO):This is a measure of how long an organisation takes to convert its sales into cash. It is calculated as the averageInvoice Accuracy:An accurate invoice is key to getting the payment in time for the sale made. An incorrect invoice results in delayed payments, waste of time in dispute resolution for both cus- tomer and supplier, and in extreme cases, loss of the customer's business. Invoice accuracy mea- sures the number of invoices that had a defect (eg. wrong discount) over the total invoices in a given period. Days Sales Outstanding (DSO)-This is a measure of how long an organisation takes to convert its sales into cash. Itis calculated as the average~/x/O Om number of days taken to collect the payment from the customer; alower number is better.