How do you use inventory KPIs and dashboards to monitor and improve performance?

Inventory KPIs and dashboards! Select Relevant KPIs: Choose KPIs that align with your business objectives. Common inventory KPIs include: Inventory Turnover Ratio: Measures how many times inventory is sold or used over a specific period. Stockout Rate: Calculates the frequency and duration of stockouts. Fill Rate: Measures the percentage of customer orders that can be immediately filled from stock. Order Accuracy: Evaluates the accuracy of orders in terms of quantity and items shipped. Carrying Cost of Inventory: Represents the cost of holding inventory in stock.

To monitor the performance of the inventory management, the first KPIs can be monitored: a) Inventory Turnover Ratio (ITR): - This is the efficiency ratio to measure the inventory performance. The higher the ITR, the higher the efficiency of the organisation. b) Inventory Carrying Cost (ICC): - In addition to measuring the ITR, it is important to measure the ICC also. This cost is expressed in the percentage. Note: - (a) and (b) need to be measured separately for the RM and FG. c) Ordering Cost: - This cost measures the cost of issuing the Purchase Order (PO). d) Inventory Accuracy Ratio: - This ratio measures the difference between the book inventory and actual inventory. e) Inventory Shrinkage Ratio. There are other ratios also.

1. Reduce Inventory Holding Costs: - Specific & Measurable: Lower storage expenses and depreciation costs by optimizing stock levels and negotiating favorable terms with suppliers. - Achievable & Relevant: Aim for a specific percentage decrease within a set timeframe, aligning with the objective of enhancing profitability. 2. Improve Customer Satisfaction: - Specific & Measurable: Enhance product availability and delivery timeliness, measured through customer feedback and order fulfillment metrics. - Achievable & Relevant: Invest in inventory optimization tools and streamline order processing procedures to strengthen customer retention and brand reputation.

1. Specific Objectives Establish clear, specific objectives such as reducing carrying costs, improving turnover rates, and minimizing stockouts. 2. Alignment with Business Strategy Ensure inventory goals align with broader business strategies to support overall organizational performance. 3. Measurable Targets Set measurable targets like reducing inventory holding costs by 10% or increasing turnover rate by 15%. 4. Time-Bound Goals Define time-bound goals, e.g., achieving a certain reduction in stock discrepancies within six months. 5. Stakeholder Engagement Engage stakeholders to ensure that inventory goals reflect the needs and expectations of the entire organization.

Some of these indicators you can use days on hand, it measures if there is a over spend on product and if the orders of those products need to be lowered or pushed to sell. Incorporate some tracking too before you set the KPI so its easier to maintain a weekly analyst of product.

1. Inventory Turnover Measure how often inventory is sold and replaced over a period, indicating efficiency in managing stock levels. 2. Stock Accuracy Track discrepancies between recorded and actual stock levels to ensure data reliability. 3. Carrying Costs Monitor costs associated with holding inventory, including warehousing, insurance, and obsolescence. 4. Order Fulfilment Rate Measure the percentage of orders fulfilled on time and in full, reflecting service levels and customer satisfaction. 5. Days of Inventory (DOI) Calculate the average number of days inventory is held before it’s sold, indicating liquidity and stock efficiency.

And for those who want a easy-to-learn and free application, I recommend Looker. The only problem is that you must have a gmail account. But since many companies use Microsoft account now, that could be difficult and could be a data security issue.

1. User-Friendly Interface Select software with an intuitive, user-friendly interface to ensure ease of use for all team members. 2. Real-Time Data Integration Ensure the software integrates real-time data from your inventory management system for accurate, up-to-date monitoring. 3. Customization Options Choose software that allows customization of dashboards to tailor metrics and visuals to your specific needs. 4. Scalability Ensure the software can scale with your business, accommodating growth and increasing data complexity. 5. Reporting Capabilities Select software with robust reporting capabilities to generate detailed insights and support decision-making.

There are so many software's you can use just for a dashboard. Depending on the need of the company its good to weigh out your options and look at the top key indicators you focus on. What are the goals we are trying to hit? Tableau is a amazing system to use for data visualization and you can present your findings with ease.

1. Key Metrics Include key KPIs that directly impact your inventory goals, such as turnover rates, stock accuracy, and carrying costs. 2. Visual Clarity Use clear, easily interpretable visualizations like bar charts, line graphs, and heat maps to present data. 3. Dashboard Layout Design a logical, user-friendly layout that groups related metrics together and highlights critical data points. 4. Interactive Elements Incorporate interactive elements such as filters and drill-downs to explore data in greater detail and uncover insights. 5. Regular Updates Ensure the dashboard updates regularly with real-time or near-real-time data to reflect the current inventory status.

For this part I recommend this book : "Storytelling with data" of cole nussbaumer knaflic It's a great book for those who want to know how to present your data, to choose the best graphic and how to use color...

Your dashboard will help you optimize your process. Adjusting the forecasts depending on demand. The market changes so adjust the spending on product or the forecast. Stay organized with and insure a good counts that are constant. If your counting food maintain a FIFO and keep track of the price adjustments and wastes.

Couple years ago I wanted to look into our variances with our COGS. There was a jump in the total loss. I took the data and made a simple bar chat in excel and found the shortening waste was more than ever. This analyst gave us the information we needed to tackle the why? We changed the way we filtered the oil, and when we dumped the oil. We also found there was a small leak under the filtration system which was the main cause for this waste. All in all its about looking at every angle and asking questions as you go.