KPIOperations & Supply Chain

Stock-Out Rate

Percentage of SKUs or product lines that experience a stock-out at any point in a period

What is Stock-Out Rate?

Stock-out rate is the percentage of active products that ran out of stock in a period. It shows how often customers cannot get what they want.

Stock-outs lose sales and damage customer loyalty, so a low rate is a sign of good availability.

How this KPI is measured

Function
Operations & Supply Chain
Sub-function
Inventory Management
Industry
All Industries
Type
Lagging
Impact
Operational
Unit
%
Measurement frequency
Weekly / Monthly
Formula
(SKUs experiencing stock-out / Total active SKUs) × 100

How to calculate it

Divide the number of stock-keeping units (SKUs) experiencing a stock-out by total active SKUs, and multiply by 100.

For example, if 60 of 1,000 active SKUs ran out during the month, the rate is 6%.

Also look at how long items were out of stock and how important they are, since a stock-out of a best seller matters more.

Where it is used

  • Protecting sales

    Keep products available.

  • Tuning safety stock

    Set the right buffers.

  • Assessing suppliers

    Find unreliable supply.

How to improve it

Tips and common mistakes

  • Holding too much stock to avoid stock-outs is costly. Balance both.
  • Weight by item importance.
  • Check accuracy of stock records.

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