Do you all measure this KPI, or is it just something I’m using?
Do you all measure this KPI, or is it just something I’m using?
I haven’t been able to find a clear source or standard name for it online.
The logic is:
For each SKU:
Covered Forecast = MIN(Stock, Forecast)
Then:
KPI % = SUM(Covered Forecast) / SUM(Forecast)
The idea is to measure how much of the total forecast is actually covered by available stock, SKU by SKU.
What I like about it is that it does not allow overstock in one SKU to hide a shortage in another SKU.
Example:
SKU A:
Stock = 120
Forecast = 100
Covered Forecast = 100
SKU B:
Stock = 20
Forecast = 100
Covered Forecast = 20
SKU C:
Stock = 100
Forecast = 100
Covered Forecast = 100
Total Stock = 240
Total Forecast = 300
If I only look at total stock vs total forecast:
240 / 300 = 80%
But using this KPI:
(100 + 20 + 100) / 300 = 73.3%
So the result shows the real forecast coverage by SKU mix, without letting excess stock in one SKU compensate for a shortage in another.
Is there a standard name for this KPI in supply chain / demand planning?