Why more inventory won’t fix your supply chain’s fill rate
Record inventory but still missing fill rate targets? The problem isn't supply or forecasting; it's your supply chain decision layer. Here's how to fix it.
Walk into enough manufacturing operations and the same pattern surfaces: inventory is at record levels, working capital is stretched to carry it, and the fill rate is still stuck in the low 90s. Orders ship late, or go on backorder, and finance wants to know why service is missing when the balance sheet has never been heavier. The shortage isn't coming from the warehouse; it's coming from decisions made weeks earlier. Which orders to prioritize. Which plants to pull from. Which customers to protect. Which supplier to call first when a component goes short. By the time the gap shows up in the fill rate, it's already too late to close it without expediting.
The instinct is to treat it as a supply or forecasting problem. So, companies buy better forecasts, add planning technology, and hold on to more safety stock. But the fill rate barely moves. When the obvious inputs change and the output doesn't, you must conclude that the problem lies somewhere else.
If you’re continually struggling with your supply chain’s fill rate, odds are you don’t have a forecasting problem; you have a decision problem.
Truth is, fill rate is not produced by the forecast. It is produced by the trade-offs people make every day:
This story was originally published by Supply Chain Dive. Read the full story at Supply Chain Dive →
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