* Is High or Low Best: Higher is Better
Undamaged Customer Order Rate measures the consistency with which the company delivers undamaged shipments to its customers. A relatively low value for this KPI suggests that the company has poor material handling procedures, ineffective product packaging, a high number of touchpoints for customer orders, improper use of packaging or transporting equipment or, potentially, poor vendor management (if the goods were already damaged when received from suppliers). Low performers will likely have to pay more in returns and warranty costs and will have higher order cycle times and rework rates.
The total number of customer orders that are shipped in good condition divided by the total number of customer orders shipped over the same period of time, as a percentage.
Two values are used to calculate this KPI: (1) the number of orders shipped to customers without any damage, and (2) the total number of orders shipped to customers during the same measurement period. Damaged shipments should be defined as any shipments that cannot be resold or used as a component due to defects in the good/material. Do not include shipments with damaged packaging that did not impact the goods/materials in the numerator of this calculation. Only include orders that were damaged prior to shipment in this calculation. Do not include orders that were damage during shipment to final destination.
(Number of Customer Orders Shipped in Good Condition / Total Number of Customer Orders Shipped) * 100
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