Order cycle time is how long a customer waits, from the order you received to the delivery they got: order cycle time = date delivered − date the order was received, averaged over the orders in a period. The useful part is splitting it into its stages, waiting to be packed, packing and shipping, and transit, because each has a different fix. In the example below, a seed company's garden center orders take 6 days on average in January and 8.7 in February, and nearly all of the extra time is orders waiting to be packed, not in the truck. Below is the formula, the stages, the two months side by side, what to do about it, and a free calculator.
The short version
- Order cycle time = delivered − received, in days.
- Split it: waiting to pack + pack to ship + in transit.
- Average it by month, and count the orders within your target.
- When the cycle grows, look at which stage grew.
- Waiting time grows in a rush; the fix is packing ahead or more hands, not a faster carrier.
- Some measure to shipped instead of delivered; say which you use.
- TaroStack records when each order was needed and when it shipped, and lets you make stock ahead from a forecast. More below.
The formula
Order cycle time = date delivered − date received
| Stage | From | To |
|---|---|---|
| Waiting to pack | Order received | Packed |
| Pack to ship | Packed | Shipped |
| In transit | Shipped | Delivered |
The three stages add up to the whole. Some businesses stop the clock when the order ships, because they don't know when it arrived; that's order fulfillment time, and it's the part you control.
An example: a seed company's rush
Sandhills Heirloom Seed Co., a made-up seed company near Grand Island, Nebraska, I use in these examples, ships seed packets to garden centers. Its twelve orders in January and February:
| Order | Received | Waiting to pack | Pack to ship | In transit | Cycle time |
|---|---|---|---|---|---|
| GC-101 | Jan 5 | 1 | 0 | 3 | 4 |
| GC-102 | Jan 8 | 1 | 0 | 3 | 4 |
| GC-103 | Jan 12 | 2 | 0 | 2 | 4 |
| GC-104 | Jan 19 | 2 | 1 | 4 | 7 |
| GC-105 | Jan 26 | 4 | 0 | 4 | 8 |
| GC-106 | Jan 28 | 6 | 0 | 3 | 9 |
| GC-107 | Feb 2 | 7 | 1 | 3 | 11 |
| GC-108 | Feb 4 | 6 | 0 | 3 | 9 |
| GC-109 | Feb 9 | 7 | 1 | 3 | 11 |
| GC-110 | Feb 11 | 6 | 0 | 3 | 9 |
| GC-111 | Feb 16 | 4 | 0 | 4 | 8 |
| GC-112 | Feb 23 | 1 | 0 | 3 | 4 |
| Month | Orders | Average cycle time | Average waiting to pack |
|---|---|---|---|
| January | 6 | 6.0 days | 2.7 days |
| February | 6 | 8.7 days | 5.2 days |
| Both | 12 | 7.3 days | 3.9 days |
Transit stays at about three days all through; the carrier isn't the problem. The waiting grows from a day in early January to a week in early February, when every garden center orders at once and each order is filled by hand, packet by packet. Only 5 of the 12 orders arrived within the seven-day target. The fix is upstream: fill the packets that every garden center orders before January, so a February order is picked from packed stock instead of waiting to be filled. How to plan stock ahead of a season is in seasonal inventory.
What a good order cycle time is
Whatever you promised, and shorter than the customer's other suppliers. A garden center that orders in February wants the packets on its rack before the weekend crowds; a week late is a weekend of sales lost. Set a target, count the orders within it, and watch which stage moves. What buyers expect of a supplier is in selling to grocery stores requirements, and how much stock to hold ahead of a rush in safety stock formula.
Get the calculator
Download the order cycle time calculator. One line for each order: type the dates received, packed, shipped and delivered; the days in each stage, the cycle time and whether it met your target fill in, with the averages at the side and by month below them. It's an ordinary Excel file with no macros, and it works in Google Sheets, LibreOffice and Numbers.
Where this stops working
The calculator shows February was slow after February is over. What would have helped is knowing in December which packets the garden centers would want, and having them filled before the orders came.
How TaroStack does it
TaroStack records when each order was needed and when it shipped, and lets you make stock ahead from a forecast.
Needed by, and shipped. Each garden center's order is a sales order with the date it's needed and the date it shipped, picked from one picking list for the day, so the waiting is on the record, order by order.
Packing ahead. Filling a run of packets is a batch that takes the seed and the packets off stock, so packets filled in December are counted stock in February, and a sales order shows while you're typing it whether the packets are there.
A forecast for the rush. On Standard, planning says what to make from a forecast, so December's packing runs come from what the garden centers ordered last year.
| The job | Spreadsheet | In TaroStack |
|---|---|---|
| How long orders waited | Worked out afterwards | Needed by and shipped on each order |
| Packets filled ahead | Boxes in the back | Batches, counted as stock |
| Can this order ship today? | Check the shelves | Shown as you take the order |
| What to pack before January | Last year's notebook | Planning from a forecast, on Standard |
Sales orders, picking lists and batches are on every plan, from $49 a month; planning is on Standard at $99. The first 30 days are free, with no credit card. If you'd like a hand setting up, ask, and we'll do it with you.