Logistics

Fill Rate

Fill rate is the percentage of customer demand met from available stock without backorders or shortages. A 95 percent fill rate means 95 of every 100 ordered units shipped on the first attempt. It measures how well inventory matches demand and feeds directly into OTIF and customer satisfaction.

How fill rate is calculated

Fill rate is units shipped divided by units ordered, measured by line, by order, or by unit. Line fill rate is stricter than order fill rate because a single short line fails the whole order. Tracking it shows where stockouts and forecasting gaps cost sales.

Fill rate, safety stock, and OTIF

A higher fill rate usually means more safety stock, which ties up cash, so distributors balance the two. A low fill rate shows up downstream as backorders and OTIF misses, which makes it an early warning metric for fulfillment problems.

Related Terms

Safety Stock

Safety stock is extra inventory held as a buffer against demand spikes and supply delays, so a stockout does not happen the moment forecasts are wrong. It is sized from demand variability, lead time, and the service level a business wants to hit. More safety stock raises service but ties up cash.

Backorder

A backorder is an order, or part of an order, that cannot be filled now because the item is out of stock, but the buyer still wants it shipped when inventory returns. It is recorded against the original order and fulfilled later. High backorder rates signal demand outrunning supply or forecasting gaps.

OTIF (On Time In Full)

OTIF (On Time In Full) is a retail compliance metric that measures whether a supplier delivered the complete order, on the agreed date, with nothing short or late. Retailers like Walmart set an OTIF threshold and fine suppliers who fall below it. It rewards reliable, accurate fulfillment.

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Frequently Asked Questions

A fill rate of 95 to 98 percent is common, though the target varies by industry and by how strictly it is measured, such as by line versus by order.

Divide the units shipped on the first attempt by the units ordered. Measuring by line is stricter than by order because one short line fails the line-level rate.

Sources: ASCM supply chain terminology

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