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KPIs we cover in Supply Chain, Inventory & Logistics

Inventory Turns

This KPI tells us how often the average inventory over a given period of time (usally a year) is sold in that same period of time.

% of total stock that is not displayed to customers

% of total stock that is not displayed to customers (most applicable in certain retail sectors).

Sell-through %

Is a percentage of units sold during a period and it is calculated by dividing the number of units sold by the beginning on-hand inventory (for that same time period).

Manufacturing Schedule Adherence

The absolute variance of actual production to scheduled production.

Inventory months of supply

Inventory on-hand divided by average monthly usage.

Average production costs of items

Average production costs of items produced within measurement period.

Inventory Days of Supply

Inventory Days of Supply = Average Inventory / Cost of a Day’s Sales

Example: $20/ $0.5 = 40 days supply

% of orders delivered with damaged products/items

Percentage of orders delivered with damaged products/items

Transit time

Measured by the number of days (or hours) from the time a shipment leaves your facility to the time it arrives at the customer’s location.

Size of safety stock

Size of safety stock. Safety stock is a term used to describe a level of stock that is maintained below the cycle stock to buffer against stock-outs. Safety Stock or Buffer Stock exists to counter uncertainties in supply and demand.

Damages as % of throughput

This is the ratio of damaged goods to actual throughput (e.g. per Truck Load).

Ontime delivery and pickup [Load, stop and shipment]

% of shipments which were delivered ontime upon the total number of goods..shipments.

Scrap value %

Scrap value as a percentage of production value.

Inventory Accuracy

Accuracy of the book inventory versus the counted inventory.

Average age of inventory

The (average) age of each product in stock. For example, product received in Jan, but remains until Aug.

Freight cost per unit shipped

Calculated by dividing total freight costs by number of units shipped per period. Useful in businesses where units of measure are standard (e.g., pounds). Can also be calculated by mode (barge, rail,ocean, truckload, less-than-truckload, small package, air freight, intermodal, etc.).

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