Glossary
Fill Rates by Order
Tags: Glossary
Whether orders are received and released consistently or released from a blanket purchase order, this metric measures the percentage of ship-from-stock orders shipped within 24 hours of order 'release.' Make-to-Stock schedules attempt to time the availability of finished goods to match forecasted customer orders or releases. Orders that were not shipped within 24 hours due to consolidation but were available for shipment within 24 hours are reported separately. In calculating elapsed time for order fill rates, the interval begins at ship release and ends when material is consigned for shipment.
What is Fill Rates by Order?
Fill Rates by Order
Fill rates by order is a key metric used in logistics to measure the efficiency and effectiveness of order fulfillment processes. It specifically focuses on the percentage of ship-from-stock orders that are shipped within 24 hours of order release. This metric is important as it provides insights into the timeliness and reliability of order fulfillment operations.
There are two common scenarios in which orders are received and released: consistent order release and blanket purchase order release. In the case of consistent order release, orders are released individually as they are received. On the other hand, blanket purchase order release involves grouping multiple orders together and releasing them as a batch.
The fill rate by order metric is calculated by dividing the number of ship-from-stock orders that are shipped within 24 hours by the total number of ship-from-stock orders released. The result is then multiplied by 100 to obtain the fill rate percentage.
In a make-to-stock production environment, the goal is to align the availability of finished goods with forecasted customer orders or releases. This means that the production schedule is designed to ensure that the finished goods are ready for shipment when the customer places an order. The fill rate by order metric helps evaluate the effectiveness of this scheduling process.
It is important to note that there may be cases where orders were not shipped within 24 hours due to consolidation. Consolidation refers to the process of combining multiple orders into a single shipment to optimize transportation costs. In such cases, if the consolidated orders were available for shipment within 24 hours, they are reported separately from the orders that were shipped within the specified timeframe.
When calculating the elapsed time for order fill rates, the interval begins at ship release, which is the point at which the order is ready for shipment, and ends when the material is consigned for shipment. This ensures that the entire order fulfillment process, including any necessary preparation or documentation, is taken into account.
By monitoring fill rates by order, logistics professionals can identify bottlenecks or inefficiencies in the order fulfillment process. Low fill rates may indicate issues such as delays in order processing, inventory shortages, or transportation challenges. This metric provides valuable insights for improving overall supply chain performance and customer satisfaction.
In conclusion, fill rates by order is a metric that measures the percentage of ship-from-stock orders shipped within 24 hours of order release. It helps evaluate the timeliness and reliability of order fulfillment processes and provides insights for optimizing supply chain operations. By monitoring and improving fill rates by order, logistics professionals can enhance customer satisfaction and drive operational efficiency.