"We hit the number this month."
That is often true. The question is which number.
In pharma distribution there are three, and they tell different stories.
Sell-in is what we shipped to the distributor. It is our invoice, not demand.
Sell-out is what the distributor sold on to pharmacies and hospitals. It is the closest thing we have to what patients and prescribers actually needed.
Distributor inventory is the stock sitting in between, best read in months of sell-out.
Read sell-in alone and a month can look excellent while the distributor's shelves quietly fill up. Read sell-out alone and you miss why the distributor is paying slowly. Read inventory alone and nobody owns it until something is close to expiry.
In my teams, the monthly review puts all three side by side, and the whole team sees them. Not to catch anyone out. So that first-line managers and reps understand where their effort is really showing up, and so nobody is tempted to close a month by pushing stock the market has not asked for.
When sell-in runs ahead of sell-out, the gap does not disappear. It sits in the distributor's warehouse and comes back later.
“Sell-in is what we shipped. Sell-out is what the market wanted.”
Lesson 6 of 17 in Step 3: Money, pricing and forecast, with the full guide and a checklist for this week.