Dropping products might sound risky—until you realize it’s the best way to raise your fill rate.
Fill rate is a deceptively simple metric: what percentage of ordered SKUs are shipped complete and on time? But behind that number lies a complex web of inventory decisions, lead times, stocking policies, and yes—SKU count. For distributors in the glass, ceramics, and refractories industry, there’s a growing recognition that dropping select SKUs can improve fill rate KPIs, not harm them.
Here’s why: The more SKUs you carry, the harder it becomes to forecast, stock, and fulfill them reliably. When inventory is spread thin across hundreds of low-volume products, your most in-demand items often end up backordered or short-shipped.
A ceramic distributor in Ohio learned this firsthand. After years of expanding their catalog to meet every custom request, their fill rate had dropped to 82%. Upon analysis, they discovered that 20% of their SKUs had fewer than three orders per year—but consumed 30% of their shelf space. More critically, their top 50 SKUs—which drove 70% of sales—were often understocked due to limited space and replenishment delays.
They launched a strategic SKU drop initiative, cutting 400 underperforming items and reinvesting that capital into deeper stock on their top 50. Within 90 days, fill rate rose to 94%, backorders fell by 60%, and customer complaints dropped noticeably.
The same holds true for glass distributors. Carrying every obscure shade or thickness of laminated glass spreads your inventory thin and increases the risk that your core SKUs—like ¼” clear tempered or solar-control panels—are unavailable when customers need them. Dropping fringe items boosts inventory availability for staples.
Strategic SKU drops must be paired with:
Clear communication to customers (with substitutions offered)
Deep analysis of historical demand and future forecasts
Collaboration with sales and procurement to prevent “rogue” reordering
It’s also important to understand customer criticality. Dropping a SKU used by three minor clients is low risk. Dropping one that serves a key refractory contractor might require custom stocking agreements or MOQs.
Lastly, monitor post-drop performance closely. Track changes in fill rate, order completeness, and customer satisfaction. This feedback loop ensures you’re cutting the right SKUs—not just the slow ones, but the strategically expendable ones.
:
Sometimes, the best way to improve your service isn’t to add more—it’s to subtract wisely. For distributors in high-spec sectors like glass, ceramics, and refractories, a leaner SKU set leads to stronger fill rates, faster turns, and happier customers. Don’t fear the cut—strategize it.
