Metrics That Help Tracking Inventory and Warehousing Efficiency
When defining the appropriate set of supply chain and inventory measurements, it is particularly important to decide which metrics will yield the most benefit and information for the least investment of resources.
The key is to focus on the few measurements that really matter, i.e. those metrics that provide the most balanced view of end-to-end supply chain performance. Before identifying the few key metrics on which to focus, however, it's important to understand how they all interrelate.
The metrics reflect the underlying realities of the supply chain they measure, and as such, none exist in a vacuum.
Why do business professionals choose ready-to-use KPIs?
Read Why do business professionals choose ready-to-use KPIs? to find out the answers to these questions:
- Can a business professional research KPIs on his own?
- How do I avoid typical problems with KPIs?
- Is ready-to-use KPI applicable in my niche?
- Is KPIs' price affordable?
- Can KPIs can be easily integrated in any business environment?
- How can KPIs make the difference to the business?
What are the benefits of Inventory and Warehousing metric:
- Storage cost per item is perhaps the most commonly used indicator in this category. Other indicators may include average time an item spend in a warehouse.
- Wastage rate per item is an indicator that directly represents efficiency and professionalism of logistics. This also includes lost orders.
- Inventory and warehousing BSC is normally a part of the larger logistics Balanced Scorecard project.
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More ideas on using Inventory and Warehousing KPI
The issue of Inventory management has several facets- 'ensuring that sufficient quantity is available at all times', 'minimum wastage occurs', 'cost in carrying the contingency volume is least' etc. Many would agree that pile-ups are of no use no matter how scarce the inputs are. This calls for obtaining the stocks only when they are needed.
The most modern concept in managing stocks that meets all these requirements is that of JIT (Just in Time). To achieve this, a really impressive integration is needed between the operations of concerned organization and its suppliers. This lowers the resources that go in procuring and managing inventory as the expenses that earlier went into 'holding' inventory get eliminated almost completely.
Implementing these strategies sets the stage for employing yet another management tool that is potent to enough to bring all 'countable factors' under one roof. Balanced Scorecard wins the battle in this scenario. One can out down the important metrics in the form of KPIs (Key Performance Indicators) to be referred to in later stages. Such a measurable approach forms a well 'tested and tried' route to be treaded on.
More useful information for Inventory Performance
Inventory and Warehousing Estimation Balanced Scoreboard Screenshots
Metrics for Inventory Performance
This is the actual scorecard with Inventory and Warehousing Performance Indicators and performance indicators.
The performance indicators include: inventory balanced scorecard, balanced scorecard designer, process perspective, part count accuracy, days of supply, lead time, obsolescence and deterioration, financial perspective, insurance, gross margin roi, avg. cost per order, lost sales analysis, storage efficiency, inventory turnover rate, inventory levels, space utilization, customer perspective, return rate, cancellation rate, non-conformance analysis, pilferage and spoilage, price of non-conformance (ponc), target ponc improvement, quality-percentage defect.
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