The Japanese have a phrase that originated from their manufacturing and production philosophies: “kaizen.”
Kaizen means “constant improvement,” and it should be the mantra of all inventory managers. But before you can improve something, you actually have to know that it’s falling short.
It can be overwhelming to try to juggle every aspect of your eCommerce business without dropping any balls.
There are suppliers to be paid, supply chains to be managed, and customers to be served. How can you possibly stay on top of it all?
The answer is Key Performance Indicators (KPIs). In this post, we’ll review some of the most common (and some lesser-known) KPIs for businesses managing inventory.
In a sea of acronyms and metrics, we’ll also discuss how you can find the best ones to monitor for your unique business needs.
We’ve got a lot to cover, so let’s dive in.
What are inventory KPIs?
Inventory KPIs (Key Performance Indicators) are metrics used to measure and evaluate the effectiveness and efficiency of a company’s inventory management.
Just as doctors take your vital signs (blood pressure, temperature, height, weight) at your annual physical, inventory KPIs act as a reflection of the overall health of your business, and help you identify bottlenecks or problematic areas.
Why inventory KPIs & metrics are important for management
Inventory KPIs and metrics are important for management because they provide valuable information and insights into the efficiency and effectiveness of a company’s inventory management processes.
As Peter Drucker famously said, “Only what gets measured, gets managed.”
If you’re going to improve, grow, and stay competitive as a product-based business, tracking KPIs is non-negotiable.
Here are some tangible benefits of regularly tracking and improving KPIs:
Improving overall inventory management
By tracking inventory KPIs and metrics, leaders can identify areas where inventory management processes can be…
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