Ecommerce Order Fulfillment

Order Fulfillment Cycle Time: How to Calculate and Reduce it

Ngoc Lee
Order Fulfillment Cycle Time: How to Calculate and Reduce it
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Businesses can provide a pleasant customer experience in a variety of ways, one of which is through streamlining the order management process. In which, order fulfillment cycle time is one of the most critical elements boosting order fulfillment and accuracy rates. Indeed, it's not enough to ship the goods on time in the eCommerce process. Enough is no longer enough for online shoppers. Therefore, optimizing your order fulfillment cycle time can help your brand get more trust, then become a preferred brand. 

Keep reading our post to learn more about the order fulfillment cycle time to help improve your business operations. 

Order Fulfillment Cycle Time: How to calculate and reduce it
 Order Fulfillment Cycle Time: How to calculate and reduce it

What is Order Fulfillment Cycle Time (OFCT) 

The Life Cycle of Order Fulfillment

The order fulfillment cycle can be known as the time it takes for a consumer to buy a product and have it delivered to their doors. Determining your OFCT provides you with crucial data about the efficiency of your order fulfillment process, tracking the customer data from online buying shows that customer satisfaction heavily depends on timely delivery. 

- Read More: Order Fulfillment Service: Benefit, Cost, And Who Should Choose 

- Read More: Order Fulfillment Cost: All of the Fee You Need to Pay 

The order fulfillment life cycle involves a set of phases from the time you receive a customer order to the time it is delivered to them. Here are those phases:

Placement of order

Once a buyer makes a purchase on the website, social media, or an eCommerce platform, the order fulfillment process begins. Then, the customers will get an email after the shop receive the orders.

Producing required goods

This phase will be completed depending on retailers' order fulfillment strategies. The goods are already available to be shipped, and the next phase of shipping occurs.

Order processing

This phase includes taking the goods from the warehouse, inspecting them for detects, packing them, and sending them to the shipping carriers.


The ready-to-ship packages are sent to third-party carriers. The optimum delivery choice is determined by the product's weight, size, and measurements.

The order fulfillment life cycle
The order fulfillment life cycle

OFCT Metrics

The order fulfillment cycle can take several days, even several weeks if something is beyond your control. No matter what will happen, you need to make sure to remain your OFCT at the low level as possible. 

So, what can you do to optimize your OFCT? 

As you know, managing order fulfillment time becomes increasingly difficult as your company expands when you have to depend on many entities such as warehouses, team members, workstations, and so on. To finish the order fulfillment process, these departments have to work together effectively, maintain good communication and utilize the other sections of your supply chain. 

Your order fulfillment cycle may be calculated in a variety of ways, therefore your OFCT can relate to a variety of metrics:

  • Promised customer order cycle time: This is the estimated time it will take to fulfill an order that you inform your customers of.  It is better than external reasons will not cause orders to be delayed, and you may improve your order fulfillment processes to minimize this situation.
  • Actual customer order cycle time: This is the average time a customer takes to receive a good after placing an order.
  • Cash to cash cycle time: The time it takes from when you spend money on raw materials and suppliers to the time you take cash from them as completed items.
  • Supply chain cycle time: The amount of time it takes to fulfill a client order while the required raw materials are unavailable. It includes the time it takes to order and receive materials, as well as the time it takes to complete the order fulfillment cycle.

- Read More: What Does Order Status Fulfillment Mean? 

- Read More: What is Order Fulfillment? Strategies and Process (7 Steps) 

- Read More: What Is Fulfillment Center And How Does It Work

Calculator Order Fulfillment Cycle Time

To be competitive in the eCommerce business, you must keep your order fulfillment cycle time to be optimized at a low level. However, given sourcing goods and parcel delivery are both outside the control of businesses, regulating the cycle time can be hard. 

- Read More: Ecommerce Order Fulfillment Guide: Process And Strategy To Improve 

Using the order fulfillment cycle time formula will be the way to enhance the process. Here is the order fulfillment cycle time calculation:

  • Order Fulfillment Cycle Time = Source Time + Production TIme + Delivery Time
Order Fulfillment Cycle Time Formula
 Order Fulfillment Cycle Time Formula
  • Production Time: The manufacturing, preparation, and packaging of an order are all included in the production time. The item should be ready to ship after this time.
  • Delivery Time: The delivery time is the amount of time that takes for a package to leave the warehouse and arrive at its destination.
  • Source Time: The source time is the period it takes for a customer to order a product and for a shop to get the necessary raw materials and commodities to complete the order.
  • Example: If a buyer places an online order for a coffee mug on March 24 and receives it on March 29, the entire order fulfillment cycle time is five days.

Improve the OFCT

The order cycle time can not meet your desires? Here we provide you with useful solutions to increase your operations' efficiency and minimize your total order cycle time. Though the details of your business will influence your approaches for improvement, many order fulfillment operations may increase their total order cycle time in 3 ways.

Consider Travel Time

Considering the distance traveled to accomplish a task is one of the easiest ways to minimize cycle time because the longest part of the order processing cycle is travel. The amount of time it takes for raw materials to arrive at a retailer's warehouse has a big impact on the entire cycle time. With this in mind, purchasing materials from nearby wholesalers or manufacturers not only can greatly reduce travel time but also help lower shipping expenses as well. 

While items from local wholesalers may be more expensive, they are worth it since they may save transit time and shipping expenses. 

Improve the OFCT
 Improve the OFCT

Analyze the Warehouse Flow

Warehouse congestion might contribute to lengthier order cycle times. Can pickers locate goods quickly? Are the shelf racks properly placed so that they may be moved around quickly? Is your fulfillment center located too far away from the picking area? All of these will make the picking and packaging process take longer. 

Besides, the overall order fulfillment cycle time can be influenced by the layout of a retailer's warehouse. Workers can work more efficiently in a space that has been optimized. You can shorten the order cycle time by detecting bottlenecks. To make the most of available space and boost picking efficiency, you may need to optimize your warehouse setup and utilize warehouse slotting. A warehouse may be optimized in a variety of ways. Reduce the distance between coordinating teams, for example. 

This phase reduces the time it takes for a shipment to transit from one team to the next. Shifting important resources to high-use locations is also a wise decision.

Implement Supply Chain Technology

Once running out of stock, one of the most losses to production, then hence your entire order cycle time happens. The bad thing is that business operations will be entirely shut down while you wait for a new supply of the required material or product. As a result, this substantially reduces your overall efficiency and capacity to satisfy your customers' expectations for timely delivery. 

You may avoid this situation by using technologies that track inventory automatically and alert you when a reorder is required before you run out of stock. In recent years, supply chain technology has dramatically advanced. 

👉 Read More: What Does Order Fulfillment In Supply Chain Management Mean? 

In fact, manual inventory management and storage just do not make sense when it comes to modern eCommerce. The sourcing, production, and even delivery processes may all be automated using various warehouse management systems. Using technology in the order fulfillment process helps reduce mistakes and speed up both order cycle time KPI and your business operations. 

👉 Read More: What is Cycle service level - Formula and Example 

👉 Read More: Top 10 Secret Order Fulfillment Strategies for Small Business

The Bottom Line

One of the most important KPIs for any order fulfillment, e-commerce, or supply-chain management operation is order fulfillment cycle time. Investing time and effort into optimizing this process, as well as trying to improve your cycle time, may help your business scale and develop. COVID-19 wreaked havoc on most businesses, particularly retailers who relied on only one or two suppliers. 

For advanced order fulfillment and a seamless customer experience, consider integrating an efficient Fulfillment Platform into your operations. Experience the benefits of a comprehensive order fulfillment service with EFEX. Start optimizing your order fulfillment cycle time today to drive business growth and enhance customer satisfaction with EFEX's order fulfillment service.

Ngoc LeeNgoc Lee is an Content Creator Manager at EFEX. She wields her long-term expertise in Logistics and Supply Chain, harnessing her top-notch writing and research skills to bring incredibly valuable content. Whether you're a small startup or a well-established enterprise, Ngoc Lee is here to equip you with the essential knowledge of e-commerce, fulfillment, and all things business-related.