In the retail business, the inventory plays a pivotal role in its growth. To overcome the challenges that might come up in the long run like rising in the product prices; sales got missed; unsatisfied customers, and many more. With the help of the key performance indicators (KPIs), you can able to check and supervise the inventory stored in the warehouse; improve on your business in buying as well as production processes, and gain profitability in your business.
The KPIs allow all the categories of companies to calculate the impact of retail business operations. So, with the help of the inventory metrics and other key performance indicators (KPIs) can help you in getting the new trends prevailing in the market to get inspired as well as how the business is itself.
Read the full blog, to learn about the topmost inventory management KPIs in 2019.
Topmost Inventory Management KPIs 2019
It helps you in understanding the inventory by calculating the sum of inventory the retailers have n stock at a particular time. The main objective is to stay aside from the spikes or the unexpected drops in the inventory; as per the business needs try to support the flow of inventory in and out. You can measure the inventory midpoint for 1 month through the formula, add onset inventory + closing inventory.
Inventory Days on-hand
It is best known as Inventory Turnover. It helps you in monitoring the number of times’ inventory that has been sold as well as replaced in a given time. For example, if the inventory days on-hand are less then it indicates that the retail business has an overstock or fewer sales. To calculate, you can try in any of the two ways: Cost of goods sold / Average Inventory, Or, Sales / Inventory.
Accuracy in order movement
This KPI is regarded as the key function in the inventory management system. Through the order movements like pick, pack, and shipment, indicates the inventory as well as packing the orders for the shipment on the customers’ door-step. Monitoring these inventory management metrics will show whether your warehouse function is strong or weak. Apart from that, the labor costs per item, as well as labor costs per hour in addition to others, will give an idea about warehouse productivity.
Order lead time
It is often known as Order cycle time. It has a core role in supply chain management as well as on the inventory control processes. To calculate the same you need to correct formula, i.e., add the time taken for the supplier to deliver the order after the customer ordered online or offline (delay) with the time taken to order again (reordering delay).
Check on supplier’s performances
This KPI checks on the supplier’s performances which improves on the retail business strategy. Suppose, you don’t follow any particular data points to monitor on the supplier’s then you will perhaps lack behind the improvement. Check on the return products whether by mistakes or fault; order you received on a specific time; and much more.
It is recommended to choose a particular KPI as per your need in the business. There are many softwares available in the market which might help you in choosing the correct KPI. Unicommerce is one such software that eases as well as managing your e-commerce business operations effectively. It allows you to work in the cloud as well as provide ERP with your company’s software. If you are a beginner or startup, you can try this software to get an overall idea about the market.