Advantages of tracking inventory metrics and KPIs
Posted: Wed Jan 22, 2025 4:30 am
KPIs and metrics are like crystal balls. They help you predict and prevent.
Once you start tracking KPIs, you will know what is working well and what is not. Here are some of the benefits of tracking inventory metrics and KPIs.
Improving customer satisfaction score
Let’s say your customer satisfaction score is 70%, which is down from last quarter due to frequent stockouts. Track KPIs like fill rate, lead time, inventory turnover, safety stock levels, and stock-to-sales ratio to prevent stockouts and create a cushion for unexpected surges in demand. As a result, you can deliver a hassle-free customer experience, increasing your overall satisfaction score.
Improving service levels and reducing stock-outs
Tracking inventory metrics shows how good your services are . For example, if your fill rates and perfect finance directors email list order rates are above 95%, you know you’ve won the service game. Your deliveries are on time, there’s always enough inventory, and customer complaints have significantly reduced.
Increased inventory accuracy and efficiency
Inventory KPIs improve overall efficiency and ensure accurate demand forecasts by highlighting areas for improvement.
For example, if you have a low inventory turnover rate, it could mean poor purchasing practices, overstocking, changing customer demands, or faulty decision making. So, you can track the accuracy of your demand forecasts, evaluate your inventory purchases, and implement good practices to avoid overstocking.
Did you know? Walmart identified delays in its supply chain by tracking its current inventory levels and turnover rates. This helped the company shift to a vendor-managed inventory model that minimized delays in inventory movement and reduced the receiving time metric.
Once you start tracking KPIs, you will know what is working well and what is not. Here are some of the benefits of tracking inventory metrics and KPIs.
Improving customer satisfaction score
Let’s say your customer satisfaction score is 70%, which is down from last quarter due to frequent stockouts. Track KPIs like fill rate, lead time, inventory turnover, safety stock levels, and stock-to-sales ratio to prevent stockouts and create a cushion for unexpected surges in demand. As a result, you can deliver a hassle-free customer experience, increasing your overall satisfaction score.
Improving service levels and reducing stock-outs
Tracking inventory metrics shows how good your services are . For example, if your fill rates and perfect finance directors email list order rates are above 95%, you know you’ve won the service game. Your deliveries are on time, there’s always enough inventory, and customer complaints have significantly reduced.
Increased inventory accuracy and efficiency
Inventory KPIs improve overall efficiency and ensure accurate demand forecasts by highlighting areas for improvement.
For example, if you have a low inventory turnover rate, it could mean poor purchasing practices, overstocking, changing customer demands, or faulty decision making. So, you can track the accuracy of your demand forecasts, evaluate your inventory purchases, and implement good practices to avoid overstocking.
Did you know? Walmart identified delays in its supply chain by tracking its current inventory levels and turnover rates. This helped the company shift to a vendor-managed inventory model that minimized delays in inventory movement and reduced the receiving time metric.