But what is order cycle time exactly?
The Auto Dealership Inventory order cycle time can be used to determine the efficiency of your operations. It shows you how long it takes your customers to receive the finished product after they place an order.
The order cycle time for parts that are purchased by customers without service would be the time it takes to get the parts they request. The order cycle time for customers who come in to your shop for repair would be the time it takes them to receive the vehicle. You don’t have complete control over the order process in these cases, as it will take the service team additional time to fix the vehicle. The order cycle will be shorter if you are able to quickly and accurately provide parts to your staff.
A shorter order cycle will result in a better customer experience, and more customers returning, referring and increasing revenues. Your order cycle time will be too long and it will lead to less customer satisfaction, more complaints, as well as a lower customer loyalty.
Slow order cycles can be another indicator that supply chain issues are occurring.
Slow order cycles may indicate that your supply chain processes are inefficient. It may be that it takes your parts team too long to process and receive parts requests. Maybe the receiving process takes too long or is complicated and results in errors that require time to fix.
Your inventory may be disorganized, making parts difficult to find, or your records are incomplete or inaccurate.
How to calculate the time it takes to order a cycle
- This equation calculates the time it takes to complete an order cycle:
- Order Cycle Time = Delivery Date – Order Day/Total Orders Shipped
Remember that you may have more specialty orders than usual for large projects. This will slow down your order cycle.
Your average order cycle times will be more efficient if you organize your orders by type of job. Calculate your average order time for specialty projects first, then figure it out again for regular maintenance jobs.