These two terms are often confused: manufacturing & production
What is production?
Wikipedia says: “Production is the act of creating output, a goods or service which has value and contributes to the utility of individuals. The act may or may not include factors of production other than labor. Any effort directed toward the realization of a desired product or service is a “productive” effort and the performance of such act is production”
In e-commerce, you don’t really need to include factors of production as if you are implementing a “manufacturing” process. At the end of the day, your essential output is what you display as an item on your website, irrespective of any sales. Customers are willing to pay for the item that they viewed on your main page, even if that viewed product has less quality than its original.
Your main page is your ultimate showcase where you can display your outputs. Therefore production, the process of preparing the output to be displayed, is highly important for an e-commerce company.
There are various types of production line e-commerce, and I will explain at least 3 of them in my future articles. For now, as a quick win for you, I would like to walk you through the performance indicators of production from the fashion retailer perspective, so that you can start application and get quick results from day one.
1) # of items shot
2) # of items edited (description of product)
3) # of items went online
4) # of items with QC (quality check)
5) # of stocks arrived at production (from inbound team to production team)
On top of these metrics above, we have to take into consideration that production is a sub-division of “E-commerce Operations”, which means the two fundamental pillars holds for production also:
A) Lead time (between milestones): delay between start and end of a process
B) Backlog: accumulation of incomplete work (items in our case)
So let’s continue writing the combination of these metrics above:
6) Average days (or hours) from production start to end (you can divide this process into sub processes such as “avg days from edited content to photo shooting” etc.)
7) Total production days (time)
8) # of items online in the same day
9) Backlog of items (for each step)
And then comes percentages, as usual. Out of total stocks arrived at warehouse (or the production office), how many of them are complete with all sub-processes of production:
10) % of items shot
11) % of items edited (description of product)
12) % of items online
13) % of items online in the same day
All of these metrics can be measured daily and weekly. You don’t need sophisticated tools for these calculations, all you need is a couple of hours of work on Microsoft Excel. Make sure you keep the relevant time stamp properly for all these sub-processes.
Please drop me an e-mail if you have any questions regarding these 13 metrics above.
Image source: Flickr