Is the inventory turnover ratio set up and automatically calculated over your whole portfolio? It is not possible to improve processes if you are not able to measure them reliably and systematically. Keep in mind that in inventory management, it is essential to measure. What should you do if your inventory turnover KPI is systematically too high compared to your average lead time? Or constantly equal to 0, because you are experiencing a flood of stock-outs?
#INVENTORY TURNOVER RATIO HOW TO#
How to optimize my Inventory? – Go furtherįinally, the last question I am often asked is simply related to performance management. It is always better to proceed step by step. If your forecast is unreliable, or if you don’t have a forecast yet, use past sales. It is wise to use your forecasts in the calculation to anticipate changes in demand You will tend to overestimate your stock coverage before a peak in sales and underestimate it before a drop in demand. Indeed, if you use the data of the last few weeks, you will not be able to anticipate strong sales variations. If your business has a strong seasonality, be careful when interpreting the value of your inventory turnover KPI. Otherwise, the calculation becomes completely wrong. Always make sure you use the same valuation for inventory and sales. I repeat this because it is a major mistake that I see very often (even with some of the clients I coach). Your indicator will get more accurate over time. Start today with your available inventory, save your data as you go along, and you’ll be able to calculate your inventory turnover over a short period. If you are in this situation, my advice is the following: don’t wait. I deal with this question regularly from members of my classes. I don’t have any Inventory data history – what should I do? Inventory Turnover: 5 Questions and common mistakes 1. Thus, in this example, the entire stock rotates two and a half times during the year.
0 kommentar(er)
