Fill rate and stockout rate: measuring how well you serve customers
Stock control has a scoreboard, and the headline number on it is not how much you hold. It is how often a customer asks for something and you have it. Fill rate puts a number on that.
The formula
92
Orders shipped complete
100
Total orders
92%
Fill rate
Multiply by 100 for a percentage. An order counts only if every line was filled.
Count the orders you shipped complete, divide by all the orders you received in the period, and multiply by 100. If 92 of 100 went out complete, your fill rate is 92 percent.
92%
92 shipped complete
8 short or late
An invented month. The eight short orders are where to look.
Three ways to count
- Order fill rate: share of orders shipped complete. The strictest, and the one customers feel.
- Line fill rate: share of order lines filled. More forgiving, because one missing line on a ten line order still counts as nine out of ten.
- Unit fill rate: share of units shipped against units ordered. Useful for big orders with many units.
Pick one and stick with it, so months can be compared.
92%
Order fill rate
97%
Line fill rate
98%
Unit fill rate
The same invented month. The strictest measure gives the lowest score.
The flip side: stockout rate
Stockout rate is the mirror image: 100 minus the fill rate. A 92 percent fill rate is an 8 percent stockout rate. Some people prefer it because it points at the problem, but it is the same information.
What to do with a low score
- Find the short orders and list the items that caused them. A handful of items usually cause most of the trouble.
- Check why. Wrong reorder point, late supplier, a record that said 12 when the shelf had none?
- Fix the biggest cause first. What to check during a stockout is a good place to start.
- Measure again next month, with the same rule.
- A: about the first 80% of value
- B: the next 15%
- C: the rest
A few items usually cause most of the trouble.
What it is good for
It gives you one number to track and a way to say whether a change helped. Raise your reorder points on the top ten items, and next month's fill rate shows whether it worked. It also makes a fair target for a buyer, since it measures what customers experience, not how much stock someone is hoarding.