Teams adopt a stock risk score to stop arguing from gut feel. The score works when it measures a few operational facts everyone agrees on — not when it becomes a black box.
What goes into the score
A practical SKU risk score for distributors usually blends:
- Velocity trend — is sell-through accelerating or fading vs your recent baseline?
- Days of cover — how long will current on-hand last at current run rate?
- Lead time exposure — will you run out before the next realistic receipt?
High risk means: if you do nothing, service or cash suffers within a defined window (often 14–30 days for wholesalers).
What the score is not
It is not a forecast of next year's revenue. It is not a substitute for supplier relationship calls. It does not replace compliance or lot-tracking rules in regulated categories.
How to use it in operations
- Set thresholds with purchasing: e.g. risk ≥ 70 → daily action, 40–69 → weekly, below 40 → monitor
- Always attach evidence (cover days, trend, last movement) so buyers can override with context
- Review overrides monthly — patterns reveal bad master data or wrong lead times
When the score is transparent, it becomes a shared language between ops, finance, and sales — not another dashboard.