How Do You Measure The Success Of An Inventory System?
A good inventory system is the lifeblood for any product-based or manufacturing business. Inventory affects customer satisfaction, and the inventory methodology used can change a company’s net income amount, which can potentially save money at tax time. For these reasons, it is important to maintain a well-run inventory system. However, in order to improve something, you must first measure it. Evaluate or create key performance indicators (KPIs). KPIs are used to measure the performance of a particular system. For instance, earnings per share is a common KPI used by investors to measure the earnings associated with one share of stock. Create one indicator dealing with customer satisfaction. This can include everything from availability to delivery options. The system must be able to match your finished goods with customer demand. Create a KPI related to order fulfillment. This should be focused on both efficiency (speed) and error reduction. A good inventory system will allow your comp
