Inventory Adjustments – These are simply the adjustments that are made against individual inventory items. These adjustments will help to determine trends in inventory accuracy. Once the trend has been identified either positive or negative an investigation may be required to understand why there is a particular issue with this item of inventory.
Booking Errors – This is a performance measure against the personnel handling the inventory and highlights issues across the inventory handling process. If a person is seen to be continually making errors then a training programme may be initiated.
Forecast Accuracy – This KPI determines the organisation’s ability to look ahead at demand for their products. This needs to be as exact as possible to allow the effective procurement of inventory to cover this future demand.
Inventory Obsolescence – This KPI measures inventory that becomes surplus to requirement and ultimately becomes redundant stock and identified for disposal as per the organisation’s disposal procedure.
Returns Rates – This KPI measures the inventory returned from its destination. The reasons will be recorded and analysed to identify trends and issues for investigation and remedy.
Inventory Turn – This KPI measures the number of times the company’s inventory cycles or turns over per year. In essence, this measures the turnaround of standard inventory within the organisation.
