Service level vs. Fill Rate and Implications on Inventory Planning

The Smart Forecaster

Pursuing best practices in demand planning, forecasting and inventory optimization

We are often asked what the difference is between these two important performance metrics for inventory planning. While they are both important for measuring how successful a business is in meeting demand, their meaning is very different. If not understood and incorporated into the strategic inventory planning process, inventory will be inefficiently allocated resulting in lower customer service and higher carrying costs. We’ve illustrated the difference in this 4 minute recording using Microsoft Excel.

Smart Operational Analytics automatically calculates historical service levels & fill rates across any item. To see how you calculate these and other operational metrics including inventory turns, supplier performance, and more register below to watch a five minute demonstration. The demo will show how our cloud platform continuously calculates and reports these metrics across thousands of items helping you identify opportunities for service level improvement and inventory reduction.

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Quantum Inventory Theory?
Physics at the quantum level is quite weird – not at all like what we experience in our usual macroscopic life. Among the oddities are “superposition”, “entanglement”, and “quantum foam.” Weird as these phenomena are, I cannot help seeing analogs in the supposedly different world of supply chain management. […]
Stop Leaking Money with Manual Inventory Controls
An inventory professional who is responsible for 10,000 items has 10,000 things to stress over every day. Double that for someone responsible for 20,000 items. In the crush of business, routine decisions often take second place to fire-fighting: dealing with supplier hiccups, straightening out paperwork mistakes, recovering from that collision between a truck and the loading dock. […]