A Service Level Agreement (SLA) in supply chain contexts defines the expected level of service between a supplier and customer, such as delivery lead time, fill rates, or inventory availability. SLAs serve as performance benchmarks and help align expectations across stakeholders. Failure to meet SLAs can result in penalties, strained relationships, and reputational damage. Inventory optimization systems help businesses meet SLAs by improving planning accuracy, enhancing replenishment strategies, and monitoring compliance in real time. This results in more reliable fulfillment and stronger partner performance.
