The chart indicates (in blue) the number of bombers present in RAF's Bomber Command squadrons at the start of January each year (except in 1940 where the July number is reported).

This number does not include aircraft held in reserve or in training units.

As can be seen, the strength of Bomber Command increased from year to year except from 1942 to 1943 when older types of bombers were removed from the order of battle.

The red bar indicates operation losses as reported by Overy. This refers to bomber aircraft that took off for a mission in the direction of the enemy but did not return. I have used the term "Operational Losses" (Op. Losses).

Note that the operational losses each year, exceed the number of aircraft available in operational squadrons at the beginning of the year. This means that the stock of aircraft was completely used up during the year and new production had to replace the losses.
During 1943 and 1944 losses were horrific as the inventory had to be replaced more than twice.
Nevertheless, production was sufficient to replace these losses and still increase the strength of the squadrons. From the industrial perspective, this was good. From the crew's perspective, it was not so good since it mean that he would probably die relatively soon, but his place will be filled by a new replacement crew.

The operational losses were not the total losses. They did not include accidental crashes in operations and other accidents. The bar in grey is the number of bombers written off (as reported by Murray) and it probably includes most of these additional losses although it probably does not include losses incurred on the ground by enemy bombing or strafing.