3PL KPI calculator

Order accuracy is orders shipped without an error ÷ orders shipped × 100, and on-time shipping is orders shipped by your cutoff ÷ orders shipped × 100. Inventory accuracy is 1 − units off ÷ units counted in a cycle count, and dock-to-stock time is the average hours from a delivery reaching the dock to its units being ready to pick. Multiply the orders with an error by what one error costs you for the monthly cost of errors.

Orders this month

Orders shippedorders Orders with an errororders Orders shipped lateorders Cost per error$

Late means shipped after your own cutoff. Cost per error is what you pay to put one right.

Cycle counts and receiving

Units countedunits Units offunits Receiptsreceipts Average dock-to-stockhours

Units off is the total gap between counted and system quantities, over or under. Example values throughout; replace them with yours.

$1,025a month

What order errors cost you: orders with an error × cost per error.

That is 3.4 errors per 1,000 orders, and $12,300 a year.

Order accuracy: 99.7%
On-time shipping: 98.9%
Inventory accuracy: 98.8%
Dock-to-stock time: 26 hours

Out of every 1,000 orders
3.4with an error
11shipped late
985or more right and on time

A sample of 1,000 orders at your rates, in blocks of 100. Each square is one order and a part-filled square is a fraction of one. It assumes no order was both late and wrong.

How each KPI is calculated

Every KPI here is a count you can pull from your order, inventory and receiving records for one month. Use the same month for all of them, and the same definitions every month, so a change means something.

If no order was both late and wrong:

1,000 − 3.4 with an error − 11 late ≈ 985.6, so at least 985 of every 1,000 orders were both right and on time.

Formulas, with your numbers
KPI and formula	Your numbers
Order accuracy(orders shipped − orders with an error) ÷ orders shipped × 100	(12,000 − 41) ÷ 12,000 × 100 = 99.7%
On-time shipping(orders shipped − orders shipped late) ÷ orders shipped × 100	(12,000 − 132) ÷ 12,000 × 100 = 98.9%
Errors per 1,000 ordersorders with an error ÷ orders shipped × 1,000	41 ÷ 12,000 × 1,000 = 3.4
Inventory accuracy(units counted − units off) ÷ units counted × 100	(8,000 − 96) ÷ 8,000 × 100 = 98.8%
Dock-to-stock timehours from dock to ready to pick, added up over every receipt ÷ receipts	1,040 hours ÷ 40 receipts = 26 hours, about 1.1 days
Cost of errorsorders with an error × cost per error	41 × $25 = $1,025 a month, $12,300 a year

What errors would cost at other rates

The same month at a few error rates, with your order volume and cost per error. Your own rate is marked.

Many errors come back as returns, with return postage and a restock on top. Size those with the return rate calculator.

At 12,000 orders a month and $25 per error
Errors per 1,000	Accuracy	Errors a month	Cost a month
1	99.9%	12	$300
2	99.8%	24	$600
3.4 (yours)	99.7%	41	$1,025
5	99.5%	60	$1,500
10	99.0%	120	$3,000
20	98.0%	240	$6,000

Measure a 3PL on the same definitions

Two warehouses’ numbers only compare when they count the same way. Before you compare providers, or your own operation with a 3PL, write down:

What counts as an error: wrong item, wrong quantity, a missing insert, a wrong address, damage in packing. Count orders, not units.
Which cutoff makes an order late, and what happens to orders that arrive after it.
Whether inventory accuracy compares units or locations, and how much difference counts as a miss.
When the dock-to-stock clock starts and stops, and whether it runs over weekends.

The ASCM Supply Chain Dictionary’s perfect order puts several of these together: on time, complete, accurate and undamaged. Our 3PL switching checklist lists what else to settle before a move, and our ecommerce fulfillment page explains how we pick, pack and ship. To weigh a 3PL against running your own warehouse, use the 3PL vs in-house cost calculator.

Common questions

How do you calculate order accuracy?

Order accuracy = (orders shipped − orders with an error) ÷ orders shipped × 100. With 12,000 orders and 41 errors: (12,000 − 41) ÷ 12,000 × 100 = 99.7%. Count orders, not units: an order with two wrong items is one error.

What is the difference between order accuracy and a perfect order rate?

Order accuracy only asks whether the order was right. The ASCM Supply Chain Dictionary describes the perfect order as a fulfillment metric covering orders that are on time, complete, accurate and undamaged. If you only know your error and late counts separately, your perfect order rate is at least 100% minus both rates, and higher if some orders were both late and wrong.

How is inventory accuracy measured?

This calculator compares units: 1 − units off ÷ units counted, where units off is the total difference between counted and system quantities, ignoring whether each was over or under. ASCM describes inventory accuracy as the share of items whose count falls within an allowed tolerance of the record, so agree which version you use before you compare.

What is dock-to-stock time?

The time from a delivery reaching your dock to its units being received, put away and available to sell. Add up the hours for every receipt in the month and divide by the number of receipts. Agree whether the clock runs over weekends and holidays.

What does an order error cost?

Whatever you pay to put it right: reshipping the right item, return postage, the time spent on the ticket, and any refund or credit. This calculator multiplies your own cost per error by your errors; it doesn’t estimate the cost for you.