4/11/2024 0 Comments Inventory turns kpi![]() ![]() Using an inventory management system IMS, any SKU that is not selling Which SKUs aren’t selling despite being in-stock ![]() Inventory Shrinkage Rate = (Recorded Inventory – Actual Inventory) / Recorded Inventory Using an inventory management system (IMS) How much inventory is currently in stock to sell Safety Stock Needed= (Maximum Daily Usage x Maximum Lead Time) – (Average Daily Usage x Average Lead Time) How much excess product brands should keep on hand in case of supply chain issues Inventory Days On Hand = (Average Inventory For The Year / Cost Of Goods Sold) x 365 How quickly a business uses up its inventory levels on average If your inventory records match your actual inventory levelsĬompare physical inventory counts with records of inventory on hand, which is known as “inventory reconciliation” Lead Time = PO Processing Time + Production Time + PO Fulfillment Time + Supply Chain Delays How long it takes to receive orders from your manufacturer Using an inventory management system (IMS), any SKU you have zero of Which product offerings are currently unavailable Inventory Holding Cost = (Storage Costs + Employee Salaries + Opportunity Costs + Depreciation Costs) / Total Value of Annual Inventory How much it costs to store and protect unsold inventory So, which inventory KPIs should you track and intentionally improve? In collaboration with ShipBob, we identified 15 inventory management KPIs that every retail brand needs to keep a pulse on: Inventory KPIs But, long term, this laissez-faire strategy won’t be replicable (allowing you to do it repeatedly) or scalable (enabling you to grow). You can’t improve the inventory management KPIs you don’t track. Tracking and improving inventory KPIs enables brands to boost efficiency, maximize cash flow, and increase profitability. Key performance indicators (KPIs) are quantifiable inventory analytics companies use to gauge progress toward a specific goal.Įcommerce businesses use inventory management KPIs to gain insight into costs, turnover, customer demand, revenue, process, and supply chain efficiency. So, we’re revisiting those 15 most valuable inventory KPIs and diving deeper into how you can boost each one. In honor of our new integration with them, we are expanding on that because we realized that tracking those KPIs doesn’t do your business much good if you don’t, improve those numbers. By tracking and improving their inventory management KPIs, brands can boost efficiency, maximize cash flow, and increase profitability.Ī few months back, we did our friends over at ShipBob a solid and broke down the inventory management KPIs that every retail brand needs to track. ![]()
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