- Inventory turnover
As the name suggests, inventory turnover indicates how frequently your entire stock turns over during a particular period. As a metric, it paints an accurate and comprehensive picture of efficiency throughout the supply chain process.
Reference values for inventory turnover vary widely depending on the type of business: the inventory of a grocery store might turn over completely 20 times a year, while the industry average for computer equipment is six times a year.
Generally, low inventory turnover in comparison to industry reference values indicates that a company is overstocked due to poor sales. An improved figure for inventory turnover points to higher revenue and an agile, efficient process.
That concludes our discussion of KPIs—but more topics are to come! Follow us.
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