Relevant inventory KPIs could include:
Inventory Accuracy – This will be regulated by various elements, usually through controlled PI counting, annual stock counts or even amending an incorrect pick that may have taken place. Stock accuracy is the major KPI for inventory as many other functions are dependent upon the accuracy of inventory such as purchasing, sales, production and despatch operations.
Receipt Accuracy – This will record the number of issues that may occur during the goods receiving process. This is conducted by comparing the inventory received against the purchase order. This measure will also be used to determine supplier delivery performance against agreed service levels.
Inventory Availability – This is also a key KPI, as this ensures the right inventory is in the right place to satisfy customer demand. This will record what inventory is available against what is required. This can often be used when quoting a customer a proposed delivery date. This is often determined using the formula – Current On Hand Inventory less Allocated Inventory.
Inventory Losses – This is another vital KPI, as it identifies issue within existing processes. For example booking errors, potential pilferage or damage.