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Inventory Turns

This KPI tells us how often the average inventory over a given period of time (usally a year) is sold in that same period of time.

Details

Formula:

Inventory Turns = Sales / Average Inventory


Unit: Number

Benchmark Results


This KPI is most used for:
Operational Excellence

Comments

  1. talei almatrafi

    what about the inventory turn over for electricity companies is it same benchmarking?

  2. Chris Duggan

    We are Internet retail selling clothing. 4 Turns a year of our inventory is what we have always aimed at. 16-42 is unheard of. Is this correct for our industry?

  3. Tom Machado

    In manufacturing inventory turns uses cogs/ average inventory( apples to apples as appose to apple to oranges when you use sales as the numerator.

  4. MICHAEL SMITH

    What is a good benchmark value for defense industry / defense production (hardware/platforms)? Don’t want to use automotive as an analog (volumes aren’t even close).

  5. Thom Smith

    I question why this is in supply chain at all. Sales and operations are responsible for getting goods out the door. Supply chain simply facilitates the process as a service function.

  6. Kenny McDonald

    I agree with Tom calculation method

  7. Mike McPhee
    over 6 years ago by Anonymous

    Ulitmately, sales is part of the Sypply Chain as a whole. the supply chain includes everything from the vendors, to the logistics/freight company, all the way through to the end user.

  8. Mahendra Navarange

    Question – what is the denominator? Is it financial value of the inventory held or number of packs/items? Sorry for a dumb-looking question.

  9. Vince LaValle

    Financial value, your cost of inventory. It’s nice to have a website where we can share KPI data for free, but you really need to compare apples to apples. Here we are comparing apples to giraffes. This graph would chart results as a “benchmark” for a company that sells sports cars and for a company that sells yo-yo’s. Unfortunately, no conclusions can be drawn from these KPI’s.

  10. Vince LaValle

    from these KPI benchmarks.*

  11. Tian qii

    Sales in weight / everage weight. is this OK?

  12. stamatis salonikis

    sales per year / average stock

  13. Alfonso Torres

    What is the standard kpi for days of inventory in Telecom industry?

  14. Muhammad Mushtaq

    Inventory Service Level KPI is to measure the level of service performed by Inventory in fulfilling their user requirement. It is reflected by the percentage of quantity or value fulfilled toward total quantity or value requested (demand) during the period of reporting.

    How can we measure the Inventory Service Level against the Preventive maintenance work orders? Work Order might contain planned material but it is possible that planned material would not be required during maintenance.

  15. Michael

    How would one suggest doing Inventory Turns for a warehouse/logistic business model where we do not know the value of products. Should we focus on products shipped out / average product inventory?

  16. Michael

    How would one suggest doing Inventory Turns for a warehouse/logistic business model where we do not know the value of products. Should we focus on products shipped out / average product inventory?

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