![]() Retrieve the complete list of orders received over the desired period.Service Rate Definition : Out of 100 orders received, the matter here is to understand how many orders are delivered on time. Discontinued products and new products not yet in stock are excluded. This calculation is only made on the active references of the catalog. This calculation is done at the instant T, ideally on the same day. ![]() The table below simply summarizes the calculation on 10 items.Įxample: I have 100 products in my catalog, only 70 are available for my customers, so I have the availability of 70/100 = 70%. In %: out of 100 products, how many are available to the customer (in-store, warehouse…). If you do not have a store, I recommend using the service rate and you can then use the availability rate as a supplement for your warehouse or factory with an ABC classification (see article ABC management). Its advantage is that it is quantity-weighted (or value), unlike the availability rate. The service rate is used in other industries when you do not have access to your customers’ stock information. The availability rate is mainly used for retail (stores) and distribution to know its availability rate in-store departments. The availability rate is the % of products available at a given time T while the service rate is the ratio of orders delivered over time to the total number of orders. 1 & 2: Availability rate or Service rate?Īnd the answer is… at least one of the two. To find this balance, it is therefore essential to set up at least these 2 KPIs. This is the challenge for all companies dealing with stock. Your objective will, therefore, be to find the right balance between customer availability and stock rotation. Theoretically, to meet 100% of your customer needs all the time, and to face all possibilities (delays, strikes, quality problems, meteorite…), you would need to have infinite stock. Also, the more stock you have, the less « efficient » it will be. We can see the curve flattening out when you win your last percentages. But this curve is unfortunately not linear (not straight). The more stock you purchase, the more you will increase your service level. ![]() Our graph below summarizes this principle. The challenge for your stock inventory and supply chain management will be to find the right balance between your stock level and the satisfaction of your customer needs (customer availability or service rate).
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |