Metrics that Matter: Inventory Effectiveness

QAD

The effective use of a manufacturer’s inventory investment is an important determinant of the company’s success. Excess and obsolete inventory is a drain on resources, as is excessive safety stock. Managing an Inventory Investment. Inventory effectiveness measures the process that delivers the right part to the right place at the right time, while minimizing investment and meeting customer requirements. Using Metrics to Measure the Health of the Business.

Inventory Metrics: From Insight to Action

Kinaxis

by Andrew Dunbar Over the last several weeks, this blog series on Inventory Management has explored the objectives and roles of inventory managers and outlined several of the improvement levers available to them. This post will discuss some of the metrics and analysis tools that an inventory manager needs to identify risk and opportunities and to make intelligent decisions to optimize the performance of their inventory. Each metric requires context.

My Take: Metrics that Matter

Supply Chain Shaman

While Joe is trying to balance the feedback from Filipe and Frank, he is often asked to change his metric targets by his CFO named Lou. After two years of research, I think that we throw the supply chain out of balance and limit its potential through the use of traditional and functional metrics. It is for this reason, that I believe that the traditional SCOR Model metrics are problematic. Achieving Balance in Metrics. Last week, I held my new book in my hand.

The Most Important Distribution Center Metrics to Track and Understand

Cerasis

Throughout the supply chain, the use of metrics to track and understand processes provides an invaluable resource for ensuring increased production and customer satisfaction. Additionally, the use of metrics fosters positive relationships with coworkers and adherence to rulesets and best practices for the respective third-party logistics provider (3PL). What Distribution Center Metrics Need Tracking? What distribution center metrics are you tracking or are not listed here?

Modern Metrics

synchrono

Given the more customer-centric demand-driven model – coupled with greater access to information – the metrics that manufacturers monitor to make improvements in operations become more focused and actionable. Inventory Turns, On-time Delivery and Fill Rate provide an overall indication of Operations and Supply Chain health, while other metrics such as Schedule Adherence, Supplier Quality and Yield provide more localized insight.

Driving Supply Chain Analytics User Adoption with Cross-Departmental Metrics

Logility

The obvious danger of this is that business rules and data governance often don’t exist from department to department or user to user, leaving an overall picture into the health of the business that is foggy because KPIs and metrics do not correlate across the organization. Executives look at high-level company metrics, while other departments such as Finance, Sales, and Operations work at a more analytical level.

Omnichannel Supply Chain Metrics: What Should Supply Chain Leaders Measure?

Cerasis

The answer lies using these omnichannel supply chain metrics to carefully track and improve operations continuously. Inventory Accuracy. This is a simple key performance indicator (KPI), another name for metrics, to track. It refers to the in-stock or out-of-stock accuracy of supplier inventory. This KPI should be as high as possible, reflecting accurate inventory available for customers from suppliers. Other Critical OmniChannel Supply Chain Metrics to Track.

3 Core Metrics & 10 Soft Metrics for Measuring Supply Chain Performance

Cerasis

3 Key Metrics for Measuring Supply Chain Performance Beyond Cost Reduction. Inventory measurement is critical and it is money after all in that it took a capital expense to procure. The goal is to keep inventory levels at a minimum to meet customer needs. Review Inventory turns and Return on Assets. For clarity, in measuring supply chain performance, we should be focusing on: inventory, working capital, and time.

Gaining Clarity on Inventory Effectiveness

Supply Chain Shaman

The impact of complexity on inventory is not quick. To help, today I want to share some of the insights from our recent Inventory Optimization study. Inventory management is a hot issue. Companies invest in project after project, yet inventory levels remain the same. In business there are many drivers of inventory, and the management of inventory levels requires discipline and a cross-functional focus. What Drives Inventory Effectiveness?

Quantum Inventory Theory?

The Smart Software

The post Quantum Inventory Theory? Blog Demand Planning Inventory Optimization Operational Analytics demand planning implementations efficient stocking ERP forecasting software inventory modeling inventory optimization kpi metrics overstock probabilistic modeling statistical forecasting supply chain analyticsPhysics at the quantum level is quite weird – not at all like what we experience in our usual macroscopic life.

Sales Dashboards: 16 Metrics For Manufacturers

Silvon Software

The more challenging part of dashboarding, however, gets down to the actual metrics that should be included as part of a performance management strategy. As a place to start, I thought I’d provide a shortlist of both simple and more complex metrics that our manufacturing and distribution clients are using in their dashboards today. Today’s post focuses on Sales metrics only. Basic Sales Metrics. More Complex Sales Metrics.

Lora Cecere on Supply Chain Metrics that Matter

AIMMS

Interview with Lora Cecere, Founder and CEO of Supply Chain Insights and Author of Supply Chain Metrics that Matter ( published December 2014 ). Metrics that Matter became a three year research project. I hired a research assistant to look at balance sheets and looked at performance and really tried to figure out which metrics mattered. We interviewed supply chain leaders and in the middle of that I decided that I would write this book, Supply Chain Metrics that Matter.

Your supply chain is costing you money – Reason #9: Relentless pursuit of one metric at the expense of other metrics.

Kinaxis

Reason #6 Not effectively managing inventory. Reason #9 Relentless pursuit of one supply chain metric at the expense of other metrics. Yet, these are similar instructions as what is passed down to the supply chain from executives focused on a specific supply chain metric. One example that I’ve seen several times is around inventory targets. The result is a lower inventory level, but much higher expedited costs and reduced customer service.

Supply Chain Dashboards – Key Metrics For Manufacturers

Silvon Software

As I mentioned in my previous post, Sales Dashboards – 16 Metrics for Manufacturers , a strategy for measuring business performance should also incorporate metrics that focus on the supply chain and other operational areas of the enterprise. Supply chain metrics and key performance indicators (KPIs) are sometimes a bit tougher to compile than sales metrics. Inventory Turns and Sales-to-Inventory Ratio.

Supply Chain Metrics - Gaining Visibility in a Data-rich World

Logility

The second part of Drucker’s quote, “if you can't measure it, you can't improve it,” really brings home the importance of having the right set of metrics. In the field of supply chain management, we have created an abundance of metrics and key performance indicators (KPIs). For the past 30 years I have been involved with multiple efforts to build a set of supply chain metrics and have learned a few things along the way.

Is Inventory Waste or an Asset?

Supply Chain Shaman

We were discussing the results of the planning benchmarking work that we have just finished, and I was sharing some insights on inventory management when one of the panelists emphatically stated, “Inventory is a waste to manage. We feel so strongly about this that we do not have an inventory planning role.” His feeling was that inventory is an asset to manage. Inventory is both. Inventory management is a complex subject.

Seven Misconceptions on Managing Inventory in a Market-Driven World

Supply Chain Shaman

When it comes to the management of inventory in value chains, frustration abounds. Executive, after executive, lament, “They have purchased many technologies and sponsored many projects to reduce inventories, but they are not seeing results.” ” I have been studying the evolution of inventory technologies as an industry analyst since 2002. Inventory is the culmination of many business decisions. The Inventory Management Journey.

Achieving a Well-Balanced Inventory – The Metrics

Valogix

Achieving a well-balanced, efficient inventory is no small task as supply chain complexity is ever increasing. Understanding and using some basic financial and accounting methods along with an advanced inventory optimization solution will help get you there and keep you there How do you get there and how do you know when you have arrived?

Inventory Management: Technology Enablers

Kinaxis

by Andrew Dunbar The modern day inventory manager described in this series is the backbone of your company’s inventory planning process. She has a strong understanding of supply chain fundamentals and is an expert at controlling the key levers impacting the inventory company’s investment in inventory. If you leave her to build reports and metrics that she needs in excel then she’ll spend all her time crunching numbers instead of planning your company’s largest asset.

DIFOT: A Metric of Supplier Performance

Unleashed

Delivery In Full On Time, or DIFOT, is a metric used to analyse how accurate and efficient your supply chain is. When it comes time to reassess the approved supplier list, then you can use these metrics to disqualify problematic suppliers and improve your own performance and supply chain. If you are measuring your own DIFOT scores as a distributor, you can use the metrics to promote your own success and ability to fulfil demand.

Stop Leaking Money with Manual Inventory Controls

The Smart Software

An inventory professional who is responsible for 10,000 items has 10,000 things to stress over every day. The post Stop Leaking Money with Manual Inventory Controls appeared first on Smart Software. Blog Business Policy Demand Planning Excellence in Forecasting Inventory Optimization Operational Analytics demand planning implementations ERP inventory modeling inventory optimization kpi metrics probabilistic modeling statistical forecasting supply chain analytics

6 Benefits of Effective a Reverse Logistics System & The 9 Core RevLog Metrics to Track

Cerasis

Importance of Metrics in Reverse Logistics Management. To monitor progress against its reverse logistics management plan, a company needs metrics that measure the financial impact of returns on the firm and on other members of the supply chain. Measures such as amount of product to be reclaimed and resold as is, or percentage of material recycled, are examples of such metrics. Energy used in handling returns : This metric is used in sustainability programs.

Metrics that Matter: Customer Service

QAD

Inventory accuracy and minimizing stockouts are very important to customer satisfaction, but a few other metrics also impact the ability to meet customer expectations. Companies can use these metrics to help ensure they are doing everything possible to satisfy their customers at a manageable and sustainable cost. It’s easy to meet delivery expectations if you carry excess inventory, but it’s an expensive and impractical solution. Choosing Metrics.

How to Measure Inventory Health

ToolsGroup

Financial executives measure inventory health with metrics like inventory turns because they view the firm from a financial viewpoint - such as how much working capital is being tied up. But from an operational supply chain planning perspective, turns is a crude metric because it doesn’t recognize the difference between “good” and “bad” inventory. Gartner delved into this issue in a recent report, Build the Capability for Inventory Health Assessment.

Manufacturing Metrics that Actually Matter (The Ones We Rely On)

synchrono

LNS Research blogger Mark Davidson said, “When it comes to metrics, it’s often said that what gets measured gets done.”. Mark also writes: “Metrics that have the attention of business and manufacturing leaders tend to be those that get measured and improved upon by their employee teams.”. But are employees being rewarded for metrics that do not in turn reward demand-driven flow and the customer signal (both real and imagined)? Metrics for Action.

Efficiency vs. Productivity: Metrics that Matter…Until They Don’t

synchrono

When we look at the organizations of today, words like efficiency and productivity get thrown around with little understanding of what is required to improve one of these measurements (metrics). Let’s discuss why an efficiency metric is usually not the right metric and what a Lean manufacturing expert does when measuring true value in the supply chain. This “lost opportunity metric” is now something that Lean manufacturing experts try to keep at the top of the list.

Supply chain inventory optimization – Beyond the analytics

Kinaxis

But the sheer complexity of supply chain networks, and the impact design decisions have on operational performance, makes supply chain inventory management aligning inventory investments with on-time customer delivery and margins a major challenge. The equivalent of 7% of America’s GDP is tied up in inventory, and accounts receivable and payable. Implementing inventory optimization. The challenges of inventory optimization can be immense.

The Future of Inventory Management

Kinaxis

by Andrew Dunbar This post concludes my inventory management blog series. Throughout this series I’ve proposed an elevated role for the inventory manager that challenges the assumption that an inventory manager is a victim of his colleagues’ business decisions and plays only a limited role in formulating inventory results. Inventory management is not a stand-alone business process that occurs after other processes are complete. General News Inventory managemen

Changing the Production Performance Metric

Logility

The production efficiency is one of several measures across the supply chain including inventory and customer service and profitability. Now, they care about how much inventory they are holding. Inside-out to outside-in is starting to turn. Anyone who has worked with asset intensive process manufacturers knows how hard it is to change the thinking about machine capacity utilization.

Supply Chain Metrics To Avoid Before It's Too Late!

Supply Chain Opz

Supply Chain Metrics are one of the most important best practices in supply chain management because " You can''t manage what you can''t measure ". However, under certain circumstances, metrics are not used or implemented properly. This article will explain to you 7 kind of supply chain metrics that you should pay special attention to. 2) Utilization Metrics : machine utilization is a classic example of this kind of metric. It''s the inventory metric).

Business Intelligence vs. Inventory Optimization: Are You Solving Symptoms Instead of the Real Problem?

ToolsGroup

In my decades of working in replenishment and inventory optimization, I’ve noticed that many companies seek solutions to symptoms rather than the underlying problem. They want to have an aging report for inventory or a report on vendor performance.

Replenishment 201: Monitoring Store-Level Inventory

SupplyPike

This month, we thought we’d dig in a little deeper and look into monitoring store-level inventory. Traited Not Valid: The item is on the modular but is not replenishing because the store manager might decide not to order the item for her store due to reasons like low sales, too many returns, too much inventory, etc. Instocks are an incredibly important metric to keep track of as well. Does the store have sufficient inventory to meet today’s forecasted demand?

Supplier Quality Management: What it is, 5 Key Metrics to Know & a 4 Step Supplier Evaluation Process

Cerasis

The next posts in the series will break down metrics and issues to consider in SQM by industry and conclude with a case study on the application of SQM. 5 Key Metrics to Use for Scoring Supplier Quality Management (From LNS Research ). The definition of this metric is similar to the way it sounds. Quality affects many different parts of the business, so it is critical to establish a comprehensive metric that provides visibility into the most important areas of operations.

Changing the Production Performance Metric

Logility

The production efficiency is one of several measures across the supply chain including inventory and customer service and profitability. Now, they care about how much inventory they are holding. Inside-out to outside-in is starting to turn. Anyone who has worked with asset intensive process manufacturers knows how hard it is to change the thinking about machine capacity utilization.

Elephant in the Room: Thoughts on Metrics That Matter in Semiconductor and Hard Disk Drives

Kinaxis

Supply Chain Insights recently published a Metrics That Matter report covering both the Semiconductor and Hard Disk Drive (HDD) industries. Semiconductor is poised to consolidate, which will have huge impact on the metrics. Understanding inventory planning will take on a new dynamic. On the downside, it appears that these industries are struggling with inventory issues. by CJ Wehlage.