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QAD Inc.

Inventory Effectiveness


Inventory Effectiveness measures the process of having the right part at the right place at the right time, with minimal investment that meets the customer requirements. Inventory is influenced by lead times, variability of supply, variability of demand, product complexity, service level agreements, product substitution, obsolescence and life cycles, material costs, carrying costs, investment strategies, cost of money, warehousing space and logistics (locations, distances, transportation methods).

Common Metrics (Top 4)

  1. Inventory Turns
  2. Inventory Accuracy
  3. Safety Stock
  4. Stockouts

More Inventory Effectiveness common metrics.

Best Practice (Top 5)

  1. Sales & Operations Planning
  2. Forecasting Techniques
  3. Lean Manufacturing
  4. Postponement
  5. Bar Coding / RF

More Inventory Effectiveness best practices.