A company’s fill rate, or fulfillment rate, is the percentage of orders a company is able to complete and ship before running out of stock entirely. Take a look at a previous Intuendi Fill Rate article to understand the fill rate calculation, the difference between service level and fill rate, and the benefits of knowing your company’s fill rate percentage. In this article, however, we will be taking a more thorough look at the different types of fill rates and where they might be applicable, as well as how to increase a company’s fill rate.
Types of Fill Rate
With a better understanding of what the fill rate of a company is, it is important to identify what type of fill rate is best-suited for your company and its operations. Different types of fill rates are used to provide different perspective on order fulfillment performance, and to help companies identify specific areas for improvement in their order fulfillment process.
Order Fill Rate: This measures the percentage of customer orders that are fulfilled in full as well as on time. This metric considers all line items listed on an order, and whether or not they were delivered in the quantities specified.
Case Fill Rate: Case fill rate measures the percentage of product cases ordered that are fulfilled correctly and on time, and is often used in industries that sell products in bulk, such as the food and beverage industry.
Supplier Fill Rate: This form of fill rate specifically looks at the percentage of items ordered from a particular supplier that are fulfilled correctly and timeously. This is useful for evaluating supplier performance, providing a company with insight into which suppliers are the most efficient and reliable in their service.
Service Fill Rate: Measuring the percentage of orders fulfilled on time and in the correct quantities, service fill rate also takes into account factors such as lead time and order cycle time. This metric is predominantly used in service-oriented industries where timely and accurate order fulfilment is critical.
Line Fill Rate: This measures the percentage of individual line items on an order that are fulfilled correctly and on time. It is a useful metric for measuring accuracy in order fulfilment.
What is a Good Fill Rate and How to Increase yours
Working in terms of percentage, a company’s fill rate goal should be for theirs to reach as close to 100% as possible. However, 100% is not always the most realistic percentage, and thus, a fill rate of 95%-99% is most often recommended. This indicates that 95% or higher of your customer base are satisfied with correctly fulfilled orders that are delivered on time. But how can your company increase its fill rate? Let us dissect the various methods.
- Enhance inventory management: The easiest way to enhance your company’s inventory management and to ensure that products are available when orders are placed is through implementation and utilisation of inventory management software to help track and manage stock levels. We always recommend using Intuendi’s inventory management software.
- Accurate demand forecasting: By analysing historical data, market trends and customer behaviour, companies are better equipped to predict demand and ensure sufficient stock availability. Have a read through Intuendi’s Demand Forecasting article for a more thorough explanation of how this works.
- Streamline order processing: Implementing efficient order processing systems help reduce the risk of errors and delays, which have the potential to heavily affect a company’s fill rate. Ways in which this can be achieved is through the utilisation of automation and integration of order management systems, which eliminate errors caused by manual labour. Furthermore, integration of order management systems with other business systems, such as inventory and accounting, ensures seamless data flow and reduces order processing time.
- Improve supply chain visibility: This can be achieved through close collaboration with suppliers and monitoring their performance. Supplier scorecards and conducting regular performance reviews ensures that suppliers are meeting their delivery commitments consistently. This also provides deeper insight into which suppliers are most effective in their work, and thus, which should be first selected. Open communication channels enable proactive identification of potential supply disruptions and help mitigate them to maintain high fill rates.
It is important to note that increasing one’s fill rate requires a holistic approach that involves coordination across departments, effective communication with suppliers, and leveraging technology to streamline operations. This results in not only an increased fill rate, but added benefits such as a more efficient order fulfilment process and enhanced customer satisfaction, which effectively leads to strengthened customer loyalty.
The fill rate is a critical metric for measuring and optimizing the order fulfillment process. By understanding the different types of fill rates, companies are able to fain valuable insights into the accuracy, completeness and timeliness of their order fulfillment process. The benefits of constant monitoring and improving upon one’s fill rates are lengthy! Increased customer satisfaction, improved inventory management, remaining current and up-to-date with the latest inventory optimization innovations, reduced operational costs, and a competitive advantage in the market are just a few of the benefits of an increased fill rate that can take your company to the next level. The fill rate serves as a key performance indicator that guides companies towards continuous improvement and helps them deliver exceptional service to their customers. Request a demonstration on how Intuendi can help improve this key metric.