Fill rate
What is fill rate in supply chain?
Fill rate in supply chain management refers to the measurement of how fully customer demand for a product or service is met through the availability of inventory. It indicates the percentage of customer orders or demand that can be fulfilled immediately from stock, without backorders or delays. A high fill rate indicates that the supply chain is effective in meeting customer demand promptly and reliably.
How to calculate fill rate?
Fill rate is typically calculated using the formula:
Fill Rate = (Number of items shipped / Number of items ordered) × 100%
This calculation gives a percentage indicating the proportion of customer demand that is fulfilled with available inventory at the time of order.
Fill rate vs. OTIF
Fill rate is closely related to On-Time In-Full (OTIF) metrics but focuses specifically on inventory availability. While fill rate measures how well inventory meets demand without shortages, OTIF measures whether deliveries are made according to schedule and in the quantities ordered. Both metrics are crucial for assessing supply chain performance but address different aspects of customer service.
Service level vs. fill rate
Service level is another term often used interchangeably with fill rate, though it can have a broader meaning. Service level encompasses fill rate as well as other factors such as lead times, customer satisfaction, and order processing accuracy. Fill rate specifically measures the immediate availability of inventory to meet demand, while service level provides a more comprehensive view of overall customer service performance.