Fill Rate: Calculate Your Business Ability to Fulfill Customer Orders
Table of Contents
What is a Fill Rate?
Have you heard about fill rate? It’s a familiar term that refers to an aspect used as evaluation material for a company’s supply chain. Why does it matter for your business? Read the full explanation below.
In the wholesale and retail sector, many companies calculate the fill rate ratio. It’s important to understand how efficient the supply chain works in order to fulfill customer orders.
Fill rate is the percentage of available items requested by the customers. It means the company can fulfill without running out of inventory to satisfy customer orders. The calculation could be measured individually or for the whole product. The company should differentiate the fill rate target for each customer segment and type of goods.
Read More: Using KPI to Evaluate Your Supply Chain Performance
How to Calculate Fill Rate
Why Fill Rate Ratio is Important for Your Business?
High fulfillment rates indicate that a company can fulfill customer orders quickly and efficiently. The fill rate gives a picture to the company of which parts of the supply chain are already productive and efficient.
Generally, why is fill rate important for your business?
Build a good reputation
Consistency of order fulfillment certainly has an impact on the business, especially in the eyes of customers.
Drive customers loyalty
A high fulfillment ratio also illustrates that the company has a good relationship with its customers. Customers can sense the company’s ability to process and fulfill orders quickly.
Provide operational Insight
Tracking orders, warehouses, vendors, and fill rates can help your business determine how effective the supply chain process is.
Read More: Using B2B Loyalty Program to Improve Retention
5 Types of Fill Rate in The Supply Chain
Order Fill Rate
Order fill rate refers to the total number of orders that have been successfully fulfilled. High fulfillment rate signifies that the company fulfilled customer orders quickly and efficiently.
Line Fill rate
Line fill rate is the percentage of the order lines a company fills. When customers place orders, companies record the sales on an order bill as line items.
Case Fill Rate
Percentage of order fulfillment which is calculated based on the number of product packages sent, especially large-scale packaging for the fulfillment of distributor/wholesaler orders.
Warehouse Fill Rate
Calculates the average order that can be fulfilled and sent by a specific warehouse to customers. The calculation concept is almost the same as order fill rate, but it’s used to measure specific warehouse’s performance.
Vendor Fill Rate
Vendor fill rate measures the percentage of vendors who have completed order shipments out of the total number of vendors from which a company receives its orders.
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