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.
More Operations & Supply Chain kpi library
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