Top Inventory Management Metrics and KPIs

Inventory accuracy

Simply put, you need to know what you have in stock and what is moving through your warehouse.

Inventory turnover

The inventory turnover calculates how many times your total inventory is sold during a given time period.

Out of stock rate inventory KPI

Meeting client expectations is crucial for effectively managing your company's inventory, particularly in the FMCG business.

Customer retention & loyalty

Customer loyalty is closely related to the management and efficiency of your warehouse. Efficient picking, packing, shipping of accurate orders on time will keep customers coming back.

Carrying cost of inventory

The carrying cost of inventory, one of the most important inventory KPI metrics, will show you the total of all expenses incurred when storing unsold goods.

Warehousing costs

This warehouse KPI assesses the costs associated with warehouse management.

Average time to sell

Examples of inventory KPIs would be incomplete without mentioning the average time to sell.

Inventory to sales ratio

This inventory KPI is also financial in nature. It is one useful metric for evaluating overstock, and it will also tell you whether your firm is prepared to deal with unexpected scenarios.

On-shelf availability

Any serious organization that wants to boost sales and profits must gauge demand and respond accordingly, which means keeping things on shelves, visible, and easily available.

Percentage of sold products within freshness date

FMCG is one of the inventory management KPIs designed to decrease waste and improve operational efficiency. It provides a visual depiction of the proportions of your inventory that has moved from shelves or stores and been fulfilled within its official freshness date.

Sell-through rate

This inventory statistic, which is an important component of a retail KPI, is especially effective at promoting optimal retail performance.

Average inventory level

Average inventory level is one of the most useful inventory health measures for any modern organization aiming to simplify their operations. It will provide you with an accurate breakdown of how much inventory your company holds throughout the year.

Backorder rate

The backorder rate is an efficient technique of tracking how many goods or items cannot be supplied when a consumer confirms or puts an order.

Week on-hand

Weeks on-hand is a key inventory statistic for manufacturing, as well as many other inventory-heavy industries, because it evaluates investment in terms of time rather than products or units of currency.

Gross margin return on investment (GMROI)

One of the inventory management measures that sheds insight on income vs investment is gross margin return investment (GMROI).

Time to receive

Time to receive is a key performance indicator (KPI) that delves down into stock fluency and movement and is a vital component of any inventory management dashboard.