What Are the Important Inventory Management KPIs?

Do you want to increase productivity and drive profit growth? Do you have an eye on international markets?

If you’re a business owner and want to venture into offshore production and markets, you need to learn to manage inventory effectively. The key to this is using measurable strategic inventory management KPIs.

This will help you create baseline numbers. The right metrics will indicate the progress of your business and grow your production capacity.

Read on to learn about the most important KPIs and how to use them.

Levels of Consumer Satisfaction

Levels of consumer satisfaction are a great way to use KPIs in inventory management. Create an inventory system that functions well and is easy to use. It should record the sales and measure customer feedback on each product.

Conduct customer satisfaction surveys to assess consumer satisfaction levels. Ask questions about customer loyalty, user experience, features of the product, and overall satisfaction with the product.

Keep track of customer feedback so that if any issues arise, they can be addressed right away. 

Stock Turnover

Stock turnover is a KPI for managing inventory that measures inventory performance. This allows you to identify how quickly inventory is moving in and out of your supply chain and helps you make the necessary changes to manage stock levels. Here are the things you need to do to use stock turnover as a key performance indicator.

To calculate the stock turnover rate, first calculate the cost of goods sold. This is the total of all products sold during a given period of time. Divide it by the average inventory held during the period, this will give you the stock turnover rate for that period.

Identifying the target KPI is useful in setting an appropriate stock level. The higher the stock turnover rate, the better the inventory performance.

Track inventory regularly to make sure it’s moving as expected. Track whether there is a decrease or increase in turnover rate over a given period of time and identify any bottlenecks. Based on the analysis, make inventory adjustments as necessary to achieve the target KPI. 

By ordering stock in advance of actual usage to make sure it is available when needed. Another possible adjustment is to set a discount rate on aged stock to help reduce overhead costs and encourage faster sales.  Also, by diversifying the stock mix and actively promoting items that are selling slower, you can reduce inventory levels and maximize stock turnover.

Inventory Accuracy

Inventory accuracy is one of the most important inventory KPIs to track and measure. Start a benchmark for accuracy by looking at your business’s current inventory accuracy rate. This will give you a target to reach or beat.

Measure and track your current and past accuracy per batch manufacturing record to determine trends and identify potential areas for improvement in your systems.

Implement process improvements to increase accuracy. This may include tighter inventory control practices, improved use of barcodes, use of inventory software, and training of store personnel.

Track and report changes in accuracy over time. This will give you an idea of which processes are helping and which are not.

Inventory Management KPIs to Drive Success

Inventory management KPIs are key to being successful. By using them, businesses can accurately track progress and look for ways to optimize their processes.

You should strive to use this information as a driving force for success. Investing in the right KPIs can provide a great return on investment. What are you waiting for? Watch your success soar!

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