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Fill rate concept
Percentage of customer or consumption orders satisfied from stock at hand. It is a measure of an inventory's ability to meet demand. Also called demand satisfaction rate.
LIFR (Line item fill rate) is a measure of the ratio of the actual orders filled in terms of parallel arrangements or lines.Example:
Suppose there are 5 lines which require 100 units each. But only 3 lines have been provided with the full order, and then only 3 lines have said to have met the order. Even if 99 units are received at the other two lines respectively they will not be considered as a fill
Formula:
Line item fill rate= Number of lines where order is filled/ Total number of lines
i.e (3/5) * 100 = 60 %
Sample Fill Rate Metrics:
Line Count Fill Rate: The amount of order lines shipped on the initial shipment versus the amount of lines ordered. This measure may or may not take into consideration the requested delivery date (see On Time Delivery) example- ABC Company orders 10 products (one order line each) on its Purchase Order #1234. The manufacturer ships out 7 line items on March 1 and the remaining 3 items on March 10. The Fill Rate for this Purchase Order is 70%. It is calculated once the initial shipment takes place. Calculation: Number of Order Lines Shipped on the Initial Order* / Total Number of Order Lines Ordered (7/10 = 70%)SKU Fill Rate: The number of SKU's (Stock Keeping Units) ordered and shipped is taken into consideration. Above, we consider each Order Line to have an equal value (1 ). Here, we count the SKU's per Order Line. example: If on Line 1, the order was for 30 skus of product "AB" and on line 2, they ordered 10 skus of item "AC". If Line 1 ships on April 1 and line 2 on April 20, the the SKU Fill Rate is 75% Calculation: Number of SKUs Shipped on the Initial Shipment / Total Number of SKUs Ordered (30/40 = 75%).
Case Fill Rate: The amount of cases shipped on the initial shipment versus the amount of cases ordered. example- ABC Company orders 6 products that total 200 cases. The manufacturer ships out 140 cases on 3/1/01 and the remaining 60 cases on 3/10/01. The Fill Rate for this Purchase Order is 70%. It is calculated once the initial shipment takes place. The number of Order Lines is not considered in this calculation. This Fill Rate measure gives "weight" to the order lines that are shipped out. Calculation: Number of Cases Shipped on the Initial Order / Total Number of Cases Ordered . (140/200 = 70%)
Value Fill Rate: Same as above, except the order line value is used instead of cases. Calculation: Value of Order Lines Shipped on the Initial Order / Total Value of the Order ($400/$500 = 80%)
What happens if a customer orders 10 products, but then decides to expedite out just one of them? Should the other 9 products be counted as a Fill Rate "miss"? ( 1 shipped / 10 ordered = 10%). The answer is no. You should factor rushed lines out of your Fill Rate calculation. This can usually be done by identifying the routing code (as in an SAP system) or by the carrier (FEDX).
*NOTE: "Shipped on the Initial Order" - usually refers to the first shipment out of the primary warehouse. Therefore, if an order line ships out of an alternate shipping facility and it ships out on/before the first shipment out of the primary warehouse, then it is considered a + to the Fill Rate.
