What is Order Fill Rate and Why Should You Care

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WHAT IS ORDER FILL RATE AND WHY SHOULD YOU CARE?
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Wholesale or distribution business
Metrics that you can apply to your business to
assess your relative performance
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Usual profit and cash flow ratios
Judge just how efficiently your business is doing
with inventory management
Pay attention to the order fill rate
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WHAT IS ORDER FILL RATE?
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The order fill rate simply refers to the
percentage of customer orders that are
immediately fulfilled by available stock
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No standard or agreed-upon measure of order fill
rate
Companies use different ways of calculating order
fill rate according to their needs
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HOW DO YOU CALCULATE ORDER FILL RATE?
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You can calculate fill rates for line items, SKU
or cases for individual invoices. In addition,
you can also calculate them across invoices
For the individual invoices, the case fill rate
of 87.5 for invoice 1 and 96.6 for invoice 2
are calculated across SKUs
Fill rate is 60 for invoice 1
50 for invoice 2
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WHY IS ORDER FILL RATE IMPORTANT?
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Meet customer demand
Avoid stock-outs
Forecasting demand accurately
Replenishing your inventory on time
Sufficient safety stock
Fulfill customer orders immediately
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High fill rate may also mask an overstocked
scenario
Low order fill rate is a sign that you need to
get your demand forecasting and purchasing
strategy in order
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HOW CAN YOU IMPROVE YOUR ORDER FILL RATE?
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Invest in Real-Time Stock Information
A
Give sales representatives the tools and
information to keep them informed about your
inventory date? Better still, the stock levels
should be updated in real-time by using inventory
management software
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Checking your real-time stock levels via EMERGE
App, your salesperson sees that San Marzano
tomatoes are out of stock and back ordered for
delivery in a months time from Italy
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Improve Your Sales Forecasting and Purchasing
Patterns
B
Historical data is immensely useful when
forecasting sales for particular products. The
more historical data the better, so get about 3
to 5 years worth
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Retail customers find that sales of baby nappies
and beer spike in the countdown to Super Bowl
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Offer Alternatives and Substitutes
C
Stores dont want customers to see gaping holes
in shelf space or an out of stock. Customers
will simply bring their purchases somewhere else
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Offer alternatives and substitutes for products
that are out of stock or face a long delivery
cycle.
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The RATIO may help you to investigate other areas
of your business or workflow so that you can
improve your order fill rate
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