The Inventory Fill Rate (or Order Fill Rate) is a critical supply chain metric that measures the percentage of customer demand that is satisfied through immediate stock availability, without backorders or lost sales. It is a direct indicator of your inventory's ability to meet customer expectations.
How to Calculate Fill Rate
The formula for Unit Fill Rate is straightforward:
Fill Rate = (Total Units Shipped / Total Units Ordered) × 100
While often confused with "Order Ship Rate," Fill Rate specifically looks at the quantity of items. For example, if a customer orders 10 items but you only have 8 in stock, your fill rate for that order is 80%.
Importance of High Fill Rates
Customer Satisfaction: High fill rates ensure customers receive what they want immediately, reducing churn.
Reduced Operational Costs: Avoiding backorders saves on secondary shipping costs and administrative overhead.
Sales Growth: Consistently meeting demand prevents customers from turning to competitors when items are out of stock.
Real-World Example:
A local electronics retailer receives orders for 1,200 units of a specific wireless mouse over a month. Due to a delay in the supply chain, they were only able to ship 1,050 units from their current stock.
Calculation: (1,050 / 1,200) × 100 = 87.5% Fill Rate.
Optimization Tips
If your fill rate is below 95%, consider implementing safety stock levels, improving demand forecasting using historical data, or diversifying your supplier base to mitigate stockout risks.
function calculateFillRate() {
var ordered = document.getElementById('totalUnitsOrdered').value;
var shipped = document.getElementById('totalUnitsShipped').value;
var resultDiv = document.getElementById('resultDisplay');
var percentDisplay = document.getElementById('fillRatePercentage');
var interpretation = document.getElementById('interpretation');
var numOrdered = parseFloat(ordered);
var numShipped = parseFloat(shipped);
if (isNaN(numOrdered) || isNaN(numShipped) || numOrdered numOrdered) {
alert("Units shipped cannot exceed units ordered for a standard fill rate calculation.");
return;
}
var fillRate = (numShipped / numOrdered) * 100;
var formattedRate = fillRate.toFixed(2);
percentDisplay.innerHTML = formattedRate + "%";
resultDiv.style.display = "block";
var msg = "";
if (fillRate >= 98) {
msg = "Excellent! Your fill rate is world-class, indicating optimal inventory management.";
} else if (fillRate >= 90) {
msg = "Good. You are meeting most demand, but there is room to optimize safety stock.";
} else if (fillRate >= 80) {
msg = "Average. You may be losing customers to competitors due to frequent stockouts.";
} else {
msg = "Warning: Low fill rate. Your supply chain needs immediate review to prevent revenue loss.";
}
interpretation.innerHTML = msg;
}