My achieved service levels are too low

You may suffer from declining service levels or service levels that are not met. This can have several causes. This article lists and explains the most common causes.

1. Not following the order

 

Late ordering has a major negative impact on the service level. The order levels are exactly such that until the planned next order you had enough to reach the desired service levels. Of course, one day late for a supplier we order every 90 days has less influence than a supplier we want to order every day. Check if any orders are still open .

Purchase -> Orders from today and earlier

 

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2. Change order recommendations

Adjusting the given order advice too often has a negative effect on the service levels. As a result, too little stock is coming in to meet all demand. If you see this more often, it indicates that the settings do not fit the supply chain.

3. Delivery time is structurally longer than expected

When a supplier is unreliable it will affect your service levels. Deliveries that arrive too late can lead to low stock levels, which in turn affect your service levels. Optiply takes into account a standard deviation that is based on the past, but there are always outliers. There are two ways to prevent incorrect delivery times. Agreements must be made with the supplier that he will deliver earlier or you can adjust the delivery time in Optiply (Suppliers -> Delivery time). Attention, this leads to higher stock levels.

4. Forgot to phase out product

When a product can no longer be delivered by a supplier or when a product goes out of stock, then (temporary) phasing out is the best way to deal with this. Phasing out a product ensures that the product is no longer included in the service level.

 

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5. Service level set incorrectly

Finally you can check if the service levels are set correctly (Settings -> Delivery reliability by category).

 

 

Tip:

As products have achieved a higher total margin in the past year, they have a greater impact on the service level of the category. In order to get a quick insight into the products that have a heavy impact on the service level you can perform the following steps:

- Choose the category of the disappointing service level (A,B,C) -> Sort by 'demand per month' (see GIF below)

- See which product performs poorly.