1. OMSAN LOJİSTİK

2. Key Performance Indicators & Inventory Benchmarking
Inventory Planning and Management
Latin America Logistics Center
Logistics Management Series -

3. Key Performance Indicators

4. Key Performance Indicators in Inventory Management
Financial
Inventory Carrying Cost (ICC)
Inventory Carrying Cost on Sales (% ICC/Sales)
Average Inventory Value (AIV)
Inventory as % of Sales
Return on Investment (ROI)
Return on Investment per Category
Productivity
Inventory Turnover Rate (ITR)
SKUs per Person
Purchase orders per hour
Quality
Forecasting Accuracy
Inventory Accuracy
Fill Rate
% Perfect Orders
Response Time
Purchase Order Cycle

5. Financial Indicators Inventory Carrying Cost (ICC)
Inventory Carrying Cost on Sales
Average Inventory Value (AIV)
Inventory as % of Sales
Return on Investment (ROI)
Return on Investment per Category

6. Inventory Carrying Cost (ICC)
Is the addition of all costs for holding inventary
ICC = %ICR x AIV
Is calculated multiplying the Inventory Carrying Rate by the Average Inventory Value

7. Inventory Carrying Rate Ranges from 15% to 45%
Opportunity Cost of Capital
Shareholders Expected Return on Investment = ROI = 25%
Warehousing = 4%
Loses = 2-5%
Damages
Evaporation
Obsolescence: Out of Date, Packaging changes
Insurance, Taxes = ?

8. Inventory as a % of Sales

9. Return on Inventory Invesment (ROI)
Company A
Company B
Sales $
1,000,000.00 $
1,000,000.00
Profit $
200,000.00 $
200,000.00
Average Inventory Value $
400,000.00 $
800,000.00
Return on Inventory
50%
25%
Return on Inventory Investment = Turnover/Average Inventory Value
Which Company would you Prefer?

10. Inventory Management per Category Financial Performance Indicators
Traditional Management
Gross Margin per SKU
ROI
Category
Gross Margin per Supplier
Profitability
Accountability
ROI
Subcategory
Subcategory GM
ROI per Supplier
Category GM
ROI per SKU
Category Management

11. Total Cost Inventory Management

12. Productivity Indicators Inventory Management
Inventory Turnover
Productivity of People in Inventory Management and Planning

13. Inventory Turnover Rate (ITR)

14. The Logictics ScorebordTM Costs – Sales Inventory Rates

15. Inventory at Polaroid’s European Subsidiaries

16. Inventory Turnover per Industry
Source: Robert Morris Associates

17. Spare Parts Industry Inventory Turnover Analysis6
5.8
5.5
5.5
5.3
5.1 5 5
4.8
4.6
4.6
4.5
4.3
4.3 4 4
3.7
Inventory Turns
3.5 3
2.5
2.3 2
1.5
Equipos de Alta
Tecnología
Computers
Electronics
Computers
ECU Electronics
Semiconductors
Telecommunications
Electronics Parts
Special Machinery
Aircraft Parts
Aircraft Engines &
Motor Vehicle Parts
Japan Electronics
Parts
Industry Category

18. Inventory Turnover Benchmark per Industry

19. Inventory Profile Analysis (IPA)
An agregate technique that compares Current Inventory with Target Inventory per SKU.
Coverage (%) = Current Inventory Compared to Target ( 0 to 100%)
Excess (%) = Anything Above Target ( no limits )
Ejemplo
Target are 10 apples and 10 oranges Current = 5 apples y 15 oranges
Coverage = 75% (5 apples + 10 oranges = 15/20 x 100)
Excess = 25% (5 oranges = 5/20 x 100)
IPA = %
IPA = %, i.e. High risks of stockouts and waste or one quarter of resources!

20. Inventory Quality Indicators
Inventory Quality Rate (IQR)
% Forecasting Accuracy
% Inventory Accuracy
% Fill Rate
% Perfect Orders

21. Forecasting Accuracy Indicators
Absolute Deviation
Algebraic Deviation
Mean Average Deviation (MAD)
Mean Aboslute Percentage Error (MAPE)

22. Accuracy of Inventory Information
% Position without Differences
% SKU without Differences
Total Value of Differences

23. Fill Rate Evaluation
upl = unidades per line
lpo = lines per order

24. Mediciones del Nivel Servicio del Inventario (Fill Rate )

25. Fill Rate Planning Average Inventory Value vs. Turns

26. Fill Rate Benchmarks per Industry
92.0%
90.0%
97.0%
94.0%
86.0%
88.0%
96.0%
98.0% X
Motor
Vehicle
Parts
Japan
Electronics US
Industrial
Products
Herb Davis
Database
Average
Industry Category
Fill Rate

27. Turns and Fill Rate Benchmarking per Company
Navistar
BellSouth
Ameritech
John Deere
Lanier
Kodak SPC
IKON
Xerox
Novellus
Hyster/Yale
AMAT/IBSS
Lucent
Boeing
Caterpillar
Delta
TANDEM
Coca-Cola Parts
Solar Turbine
IBM
Cummins Engine
Ford CS

28. Standardised Benchmarking of Inventory Performance

29. Complexity Factor of Inventory Management

30. Complexity on Inventory Performance Benchmarking

31. Inventory Quality Rate (IQR)
IQR = $Active Stock/ $Total Stock.
IQR = AIV Active / AIV Total

32. Gaps Analysis of Inventory Performance