Business Terms Dictionary

Flow Index

The Flow Index is a metric that measures the average order frequency of an item in relation to all other items in a supply chain. It helps assess how often a product is replenished or moved compared to others. © Copyright 2025 Demand Driven Institute. Used with permission.

What is it used for?


The Flow Index is used to analyze inventory movement patterns, classify items based on their replenishment behavior, and support demand-driven planning. A higher Flow Index indicates frequent replenishment, while a lower one suggests slower movement.


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With ForgeFlow Cloud ERP, the Flow Index helps fine-tune DDMRP buffer settings by identifying fast- and slow-moving items. This ensures that inventory levels dynamically adjust to actual demand patterns, improving material flow and preventing both shortages and excess stock.
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