Metrics that Matter: Inventory Effectiveness
JUNE 25, 2019
The effective use of a manufacturer’s inventory investment is an important determinant of the company’s success. It is critical to monitor inventory effectiveness using five key metrics: Expedited orders, inventory turns, obsolete inventory, safety stock and stockouts. Inventory Turns: This represents the number of times a company sells and replaces its stock of goods during a given period. Many companies just estimate safety stock levels, which may or may not be effective.