RS1
Order Cycle Time
The Order Cycle Time metric (OCT) measures the average time required to fulfill customer orders; demonstrating the speed at which the company can satisfy demand.
Calculation
| Order Cycle Time | |||||||||
| = |
| ||||||||
where
- Delivery Date = The date/time the order was delivered and accepted by the customer or the customer's agent at the agreed delivery point. Example agreed delivery points include: Pickup (EXW), Departure Port (FCA, FAS) or Vessel (FOB), Destination Port (CPT, CIF, CFR, DAT) or Customer (CIP, DAP, DDP)
- Order Date = The date/time the order was submitted by the customer
- n = Total number of orders or order lines delivered
Unit of measure: Days (Calendar days)
Importance
Companies with shorter Order Cycle Times are more responsive to customer orders. Longer lead times may ultimately result in customer dissatisfaction and competitive disadvantage. Order Cycle Time is considered less relevant to Make-to-Stock supply chains, these generally put more emphasis on improving Fill Rates.
Notes
The impact of planning processes on Order Cycle Time is limited; Order Cycle Time is typically measured for MTO and ETO supply chains, where planning is mainly focused on establishing capacity. Planning will have a direct impact on Order Cycle Time if or when capacity is or becomes the primary constraint.
Make-To-Stock (MTS) supply chains typically measure Order Fill Rate, as Order Cycle Time may underemphasize the scale of product shortages.
Alternative names include: Order Fulfillment Cycle-time. Order-to-Cash
Community Importance Rating:
Hierarchy
| ID | Name | Level | x |
|---|---|---|---|
| RS | Responsiveness | 0 | RS |
| RS1 | Order Cycle Time | 1 | RS1 |
| RS11 | Planning Frequency | 2 | RS11 |
| RS12 | Deliver Cycle Time | 2 | RS12 |
| RS13 | Make Cycle Time | 2 | RS13 |
| RS14 | Sourcing Cycle Time | 2 | RS14 |
Process(es)
| ID | Name | Level | x |
|---|---|---|---|
| P | Plan | 1 | P |
| P1 | Plan Supply Chain Operations | 2 | P1 |
| P2 | Plan Source | 2 | P2 |
| P3 | Plan Make | 2 | P3 |
| P4 | Plan Deliver | 2 | P4 |
| S | Source | 1 | S |
| S2 | Source-to-Order | 2 | S2 |
| S3 | Source-to-Engineering-Order | 2 | S3 |
| M | Make | 1 | M |
| M2 | Make-to-Order | 2 | M2 |
| M3 | Make-To-Engineering-Order | 2 | M3 |
| D | Deliver | 1 | D |
| D1 | Deliver-From-Stock | 2 | D1 |
| D2 | Deliver-to-Order | 2 | D2 |
| D3 | Deliver-To-Engineering-Order | 2 | D3 |
| D4 | Deliver Returns | 2 | D4 |
Term(s)
| ID | Name | Clear | x |
|---|---|---|---|
| CIP | Carriage and Insurance Paid To (Destination) | CIP | |
| CPT | Carrier Paid To (Destination) | CPT | |
| CFR | Cost and Freight (Destination Port) | CFR | |
| CIF | Cost, Insurance and Freight (Destination Port) | CIF | |
| DDP | Delivered Duty Paid (Destination) | DDP | |
| DAP | Delivered at Place (Destination) | DAP | |
| DAT | Delivered at Terminal (Destination or Destination Port) | DAT | |
| DRP | Distribution Requirements Planning | DRP | |
| DRP-II | Distribution Resource Planning | DRP-II | |
| EXW | Ex Works (Origin) | EXW | |
| FAS | Free Alongside Ship (Departure Port) | FAS | |
| FCA | Free Carrier (Carrier) | FCA | |
| FOB | Free On Board (Departure Port) | FOB | |
| MRP-II | Manufacturing Resource Planning | MRP-II | |
| MRP | Material Requirements Planning | MRP | |
| O2C | Order-to-Cash | O2C |