Supply Chain, Inventory & Logistics

Average production costs of items

Average production costs of items produced within measurement period.
Inventory months of supply
Inventory on-hand divided by average monthly usage.
Average age of inventory
The (average) age of each product in stock. For example, product received in Jan, but remains until Aug.
Inventory Accuracy
Accuracy of the book inventory versus the counted inventory.
Inventory Turns
This KPI tells us how often the average inventory over a given period of time (usually a year) is sold in
that same period of time.
% of backorders
Percentage of unfulfilled orders.
Customer order cycle time
The average time it takes to fill a customer order.
Cash to cash cycle time
The number of days between paying for raw materials and getting paid for the product by the customer.
Perfect Order Measure / Fulfillment
The error-free rate of each stage of an order. Error rates are captured at each stage (order entry, picking,
and delivery, shipped without damage, invoiced correctly) and multiplied together.
On time ship rate
What percent of orders where shipped on or before the requested ship date. On time ship rate can be
calculated on a line item, SKU, case or value basis.

Fill rate
The number of items ordered compared with items shipped. Fill rate can be calculated on a line item,
SKU, case or value basis.
Freight cost per unit shipped
Calculated by dividing total freight costs by number of units shipped per period. Useful in businesses
where units of measure are standard (e.g., pounds). Can also be calculated by mode (barge, rail, ocean,
truckload, less-than-truckload, small package, air freight, intermodal, etc.).
Transit time
Measured by the number of days (or hours) from the time a shipment leaves your facility to the time it
arrives at the customers location.
Manufacturing Schedule Adherence
The absolute variance of actual production to scheduled production.
Scrap value %
Scrap value as a percentage of production value.
Ontime delivery and pickup [Load, stop and shipment]
% of shipments which were delivered ontime upon the total number of goods. Shipments.
Sell-through %
Is a percentage of units sold during a period and it is calculated by dividing the number of units sold by
the beginning on-hand inventory (for that same time period).
% of total stock that is not displayed to customers
% of total stock that is not displayed to customers (most applicable in certain retail sectors).
Size of safety stock
Size of safety stock. Safety stock is a term used to describe a level of stock that is maintained below the
cycle stock to buffer against stock-outs. Safety Stock or Buffer Stock exists to counter uncertainties in
supply and demand.

% of orders delivered with damaged products/items

Percentage of orders delivered with damaged products/items.
Supply chain cycle time
The total time it would take to satisfy a customer order if all inventory levels were 0.
Inventory replenishment cycle time
Measure of the Manufacturing Cycle Time plus the time included to deploy the product to the
appropriate distribution center.
Freight bill accuracy
Calculated by dividing the number of error-free freight bills by the total number of freight bills in the
period. Errors can include incorrect pricing, incorrect weights, incomplete information, etc.
On-time pickups
Calculated by dividing the number of pick-ups made on-time (by the freight carrier) by the total number
of shipments in a period. This is an indication of freight carrier performance, and carriers affect on your
shipping operations and customer service.
Outbound freight costs as percentage of net sales
Calculated by dividing outbound freight costs by net sales. Most accounting systems can separate
freight in and freight out. Percentage can vary with sales mix, but is an excellent indicator of the
transportation financial performance.
Empty miles
Percentage of miles (trips) that carried no inventory/freight.
Sales order by FTE
This indicator measures the number of customer orders that are processed by full time employees per
day. This helps evaluate the workforce cost per order.
% of undamaged goods after shipping/transportation
Percentage of undamaged goods after shipping/transportation
Sell through %
A percentage of units sold during a period and is equal to:
Units sold divided by (units sold + on hand inventory)

Number of line items picked

Number of line items picked per day.
Optimize Load Fulfillment (OLF) %
Optimize Load Fulfillment (OLF) % to the carrier.
Firstly, You have to review performance of the product itself, then (if it is needed) decide to re-engineer
(if possible). Secondly, hand in hand with sales to increase the load (negotiate with the customer) or
combined (console) the load if it is little baby cargo.
Damages as % of throughput
This is the ratio of damaged goods to actual throughput (e.g. per Truck Load).
% of correctly picked line items
Percentage of correctly picked line items.
% of safety stock used
Percentage of safety stock used in measurement period. Safety stock is a term used to describe a level of
stock that is maintained below the cycle stock to buffer against stock-outs. Safety Stock or Buffer Stock
exists to counter uncertainties in supply and demand
Forecast Accuracy
Mean Absolute Deviation (MAD) on a line item level between SKU forecasts and actual sales as a % of
total sales forecasts for a particular period.
Quantity per shipment
Average quantity per shipment.
% of stock available at customers first request
Percentage of stock available at customers first request.
Inventory management cost as % of gross sales
Inventory management cost as a percentage of gross sales.
Inventory holding costs (IHC) as % of gross sales
Inventory holding costs (IHC) as a percentage of gross sales.

% of Inventory items incorrectly located

Percentage of Inventory items incorrectly located.
% of inventory items with incorrect stock balances
Percentage of inventory items with incorrect stock balances.
Total transport cost as % of delivered sales
Total transport cost as a percentage of delivered sales.
Inventory to obsolete goods ratio
Inventory to obsolete goods ratio.
The ratio indicating the relative measure of the currently obsolete or inactive assets held by an entity.
CALCULATION: (Obsolete or Inactive Assets) / Total Assets
Total logistics costs as a percentage of sales
Total logistics costs as a percentage of sales.
% of accuracy in physical stock against system stock
% of accuracy in physical stock against system stock
Inventory Days of Supply
Inventory Days of Supply = Average Inventory / Cost of a Days Sales
Ontime line count
Ontime line count: amount of order lines shipped ontime relative to the amount of lines ordered.
Accessorials as percent of total freight
Calculated by dividing accessorial and surcharges by total freight expenditures for the period. Many
freight carriers will charge extra fees for trailer detention/demurrage, re-delivery, fuel increases, and
other expenses or extra services. Often, these are extra costs incurred due to inefficient processes.
Ontime value %
Ontime value rate: value of order lines shipped ontime / total value of the orders.

% of shipment visibility/traceability
Shipment visibility/traceability percentage: calculated by dividing the total number of shipments via
carriers with order tracking systems, by the total number of shipments sent during a period.
% of EDI transactions
Percentage of orders received via electronic data interchange, EDI.
% of time spent picking back orders
Number of hours spent on picking back orders as a percentage of working hours.
Percentage of stock controlled SKUs
This KPI indicates the total SKUs under automatic replenishment cycle. Higher the percentage out of total
SKUs means your inventory planning process is sound and chances of costly stock outs are less. This KPI is
useful for continuous process industries where the demand for stock items is very erratic.
Percentage of duplicate stock numbers
This KPI helps to control multiple stock numbers for identical inventory. This can be found only when you
have identified the total duplicates among your SKUs but you have not auctioned. Once, you have
identified a multiple stock number, you have to merge the stocks to one stock number and make other
stock numbers inactive for any procurement.
You can also monitor the KPI in terms of dollar value. Once you have eliminated the duplicate stock
number by merging the stock and making other all but one multiple code inactive, you can exclude from
the numerator. This KPI helps to monitor the progress made in eliminating the multiple stock numbers
from your inventory.
% of orders/items arrives at the right location
Percentage of orders/items arrives at the right location.
% of orders that were captured with incorrect attributes
Percentage of orders that were captured with incorrect attributes (e.g. part #, qty, request date, delivery
address)
% of orders that were delivered with requested documentation
Percentage of orders that were delivered with the requested documentation.
% of uninterrupted orders
Number of Orders with Specific Blocks or Flag / Total Number of Orders

Requested Time in Full (RTIF)

RTIF measures the success at delivering according to original customer delivery requirements
Inventory holding costs (IHC) as % of inventory value
Inventory holding costs (IHC) as a percentage of inventory value.
% of warehouse shrinkage
Percentage of warehouse shrinkage.
Number of active suppliers per supply employee
Number of active suppliers per supply employee.
% of goods received from 1 batch
It is a purchasing KPI that helps to reduce the number of batchs in a delivery from the supplier and that
helps to release goods in less time by quality department
Cubic meters per 1,000 packages
Cubic meters per 1,000 packages.
Percentage of problem suppliers
Percentage of problem suppliers.
% of logistics outsourcing
Percentage of logistics outsourcing (based on for example labour or costs).
% of items equipped with Radio frequency identification (RFID)
Percentage of items equipped with Radio frequency identification (RFID).
% of items tracked with Radio frequency identification (RFID)
Percentage of items tracked with Radio frequency identification (RFID).
Customer order pick-to-ship cycle time
Average customer order pick-to-ship cycle time.
Supplier delivery dock-to-stock cycle time
Average supplier delivery dock-to-stock cycle time.

Orders, Damage Shipments

The percentage of orders or order lines that are processed without damage.
Orders, Correct Documentation
The percentage of orders or order lines received with correct shipping documents by customer or
location.
Orders, Delivery Errors
The percentage of time a product is considered unacceptable against standard criteria. The number of
unacceptable products divided by the total number of units produced during the manufacturing run.
Orders, Invoice Errors
The percentage of invoices or invoice line items issued without error.
Order Authorization to Order Receipt Cycle
Time in calendar days from customer order authorization to order reception.
Order Cycle, Customer Receipt to Install
Time in calendar days from receipt of customer order to installation completed.
Order Cycle, Entry to Payment
Time in calendar days from initial customer contact to final disposition.
Order Cycle, Order Entry to Build Start
Time from completion of order entry to manufacturing release, in calendar days.
Order Cycle, Order Entry to Shipment
Time in calendar days from order release to manufacturing to customer shipment.
Stored items per employee
It measures the quantity of items in the deposit divided by the number of employees devoted to the
management of the deposit. It tries to measure the efficiency in the operations and it is very much
influenced by the information system, the technology and the preparation of the lay-out for the picking
process.
Percent Variability in Lead Time
Measures the level adjustment of the SKU to variation in pattern and quantity of demand. Represented
as a percentage. A value of 1-2% is set as a benchmark.

Inventory Age, Value weighted

The dollar value weighted average time in days that goods are held in stock.
Insurance costs as % of inventory costs
Insurance accounts for a portion of the inventory costs. Since it is better to be safe than sorry, companies
generally get the material insured. It generally works out to 1%.
Floor space utilization
Warehouse space utilization percentage.
This ratio measures how efficiently the storage or distribution facility is using floor space. The formula
identifies floor space used to generate sales.
Inventory Dollars Discrepant
Inventory Dollars Discrepant
Order Cycle, Order Receipt to Entry
Order Cycle, Order Receipt to Entry
Order Cycle, Order Shipment to Receipt
Order Cycle, Order Shipment to Receipt
Orders, Receipts Error Free
The percentage of orders or order lines received without error by supplier or location.
Order Fill Rate, Customer
The number of orders / lines that are processed complete divided by the total orders / lines processed
within the measurement period. For enterprises with multiple warehouse locations use system and
facing fill rates.
Order Fill Rate, Supplier
For each supplier, the number of orders / lines that are received complete divided by the total orders /
lines received from that supplier in the measurement period
Order Fulfillment Lead Time
This is a measure of an organizations ability to quickly serve customer demands. This figure measures
speed of service and indicates the average time from order placement to customer receipt.

Mean time order to activation

Mean time order to activation.
Fulfillment Process Costs as % OpEx
Fulfillment Process Costs as percentage of operational expenses (OpEx).
% of Orders Requiring Rework
Percentage of Orders Requiring Rework (e.g. by Cause Type).
Mean Duration to Fulfill Service Order
Mean Duration to Fulfill Service Order
% Orders Delivered by Committed Date
Percentage of Orders Delivered by Committed Date.
Average dock-to-stock time for receiving
Average dock-to-stock time for receiving.
Average dock-to-stock time for inspection/testing
Average dock-to-stock time for inspection/testing.
% of inventory in accounts payable
Percentage of inventory in accounts payable.
Average days late per late order
Average days late per late order.
Picks per man hour
Cases picked per man hour.
Pallet Order Completeness
Percentage of complete orders (pallet picking operation).
Pallet Order Correctness
Percentage of correct orders (pallet picking operation).

Box Order Completeness

Percentage of complete orders (case picking operation)
Box Order Correctness
Percentage of correct orders (case picking operation)
% of overdue orders
Percentage of overdue orders
% of neglected orders
Percentage of neglected orders.
% of incorrectly assigned orders
Percentage of incorrectly assigned orders.
% of escalated orders
Percentage of escalated orders.
Backlog of orders
Number of open orders older than 28 days (or any other given time frame) relative to all open orders
% of re-opened orders
Percentage of re-opened orders.
Average Unit Cost
Average cost of one unit.
Inventory turnover
The number of times that a companies inventory cycles or turns over per measurement period (month,
quarter, year).
Manufacturing cycle time
Measured from the Firm Planned Order until the final production is reported. It usually takes into
account the original planned production quantity verses the actual production quantity.

Stock outs in period

Stock outs indicate where a demand cannot be met due to the absence of the required inventory.
Inventory lead time
Lead time is the length of time it takes to obtain inventory from suppliers.
Stock cover
Stock cover is the length of time that inventory will last if current usage continues.
Inventory Carrying Costs
Inventory Carrying Cost = Inventory Carrying Rate X Average Inventory Value
Inventory Value
Inventory Value = (Average Unit Cost) x (Units of Current Inventory)
Inactive Stock
Products with Stock (in units or $), and without movement-sales in a given period of time (depending on
movement of the market). Useful to define continuity of a specific product-size (SKU), or promotion
campaigns. Most useful in companies with a big number of SKUs.
Inventory service level
Service Level KPI is to measure the level of service performed by Inventory or Stock Control in fulfilling
their customer (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.
Value of obsolete stock
Value of obsolete stock inventory items replaced by an alternative but which may still be usable (or
saleable) until exhausted.
Gross Margin Return on Inventory Investment
The GM ROII multiplies Inventory Turns (which tells us how healthy our stock is) by Gross margin (which
tells us the percentage of profit we make on each sale).
Warehouse productivity level
Total amount of pickings devided by total direct hours spend (picks per hour).

Customer order promised cycle time

The anticipated or agreed upon cycle time of a Purchase Order. It is gap between the Purchase Order
Creation Date and the Requested Delivery Date. This tells you the cycle time that you should expect (NOT
the actual).
Material value add
Sell price minus material cost divided by material cost.
Delivery Schedule Adherence (DSA)
Delivery Schedule adherence (DSA) is a business metric used to calculate the timeliness of deliveries from
suppliers. Delivery schedule adherence is calculated by dividing the number of on time deliveries in a
period by the total number of deliveries made. The result is then multiplied by 100 and expressed as a
percentage.
Missed Deliveries per Million (MPM)
Measures supplier on time delivery by part reference ordered using the same logic as the quality
measure PPM
Several missed categories are defined such as ; Missing part reference, undershipped, overshipped,
delivery window missed etc.
Unit Cost per batch
Unit Cost per batch = (Cost/Quantity) for each batch
Primarily used in FIFO (First In First Out) Method
Assumes an inventory of non-unique goods (that is, every one is similar to every other one)
Generally preferred inventory valuation method. Assumes inventory is sold in the order that it is stocked,
with the oldest goods sold first and the newest goods sold last. Uses the unit cost per batch of
acquired/produced goods, and counts the inventory backwards from the newest batch.
Average time of import or export transaction
Average time needed to process and complete an import or export transaction.
Early PO Receipts to PO due date
Early receipts to PO date This is a measure on your suppliers and their diligence to supply per the
contract date. Early receipts to PO produce unexpected deliveries turning up, congested goods inwards
and of course higher that projected inventory levels.
Measure: PO due date vs Receive to Dock (stores) date.

Early receipts to MRP date (required date)

Early receipts to MRP date MRP due date vs Receive to Dock (stores) date.
Number of deliveries with past due goods issue date
Number of Deliveries where the Goods Issue date (date it should leave the premises to reach customer on
time based on transit time) is equal to or less than todays date.
Product lead time
time taken by raw good to transform into finish product
Average time difference between LOGR and LOGC
when Logistic support is required a LOGR is set to the worrk order and after completion of the logistic
activity (such as finiding material master code, correcting the purchase requisition, getting quaotes or
manufactureres part number, technical specification etc.) the planner sets LOGC (Logistic complete).
The KPI is measured as the average time difference between LOGR and LOGC for each material or service
group and also for each important vendors.
Internal cycle time Receipt of material to GRN/MRR
Efficiency in warehouse operations hinge on quick turn around of activities and ensuring visibility of
material tracking by creating Goods receipt note or material receipt report timely in system
% of slow moving products
Percentage of slow moving products. Slow moving products are those products that you may have more
than x number of weeks worth in inventory.
Average cost involved with import or export transaction
Average cost involved with import or export transaction.
Average consignment size
Average consignment size (pallet-loads).
Recommended Cut Orders
A periodic measure of the volume or value of sales orders in which the current inventory is insufficient to
fill. This measurement can be by warehouse location, and does not necessary result in lost sales or
backorders since corrective action may be applied.
Average age of order backlog
Average age of order backlog.

Value of items stolen from inventory

Monetary value of items stolen from inventory.
% of unsell-able stock due to out-of-fashion
Percentage of unsell-able stock e.g. due to going out-of-fashion.
% of unfinished received items
% of items either not received or items received but pending put away
Total value of consignment stock
Total value stock that is legally owned by one party, but held by another party. It remains the property of
the supplier until it is actually used (issued) and the items that are left over can be returned to the legal
owner.
% of filled warehouse locations
% of filled locations or % of Free space available in the warehouse
PPV
Purchase Price Variance
Evaluating the Cost price of a product in reference to the price at a given period of time.
Calculate as follows:Purchase prices x qty purchased in Period 1(say in 2008 you purchased the item at different times at
different prices)
Purchase pricess x qty purchased in Period 2
Sum Period 1 and divide by total Qty(period 1) = ACP 1
Sum Period 2 and divide by total Qty(period 2) = ACP 2
Now the difference in ACP of period 1 & 2 is the variance which can be multiplied with qty between 2
periods to see positive or negative Purchase variance
Item issuing time
The time required to issue an item from the store ( the time, the store man takes to deliver the item to
the requester/ end user )
Carrying Costs, Finished Goods
Carrying Costs, Finished Goods The total cost of all process steps needed to hold a finished good. These
might include: storage costs, handling costs, insurance, breakage, obsolescence, depreciation, taxes and
the opportunity cost of capital.

Return Warehouse Expense

Return Warehouse Expense
Economic Order Quantity (EOQ)
In fixed order quantity systems, it is defined as the size of an order that minimizes the total inventory
cost, under a given set of circumstances, obtained by trade off analysis between the cost of placing an
order and the cost of holding stock
Frequency of emergency orders
Frequency of emergency orders.
Range in number of orders issued
Range in the number of orders issued e.g. per day. Acts as a measure for the variability that might exist
in the system. Helps in the analysis of the demand characteristics.
Frequency of canceled orders
Frequency of canceled orders
Order Management Costs
The aggregation of the following cost elements: Create Customer Order Costs, Order Entry and
Maintenance Costs, Contract/Program and Channel Management Costs, Installation Planning Costs,
Order Fulfillment Costs, Distribution Costs, Transportation Costs, Installation Costs, Customer
Invoicing/Accounting Costs
Order Management Costs, Order Specific
Overhead costs associated with configuring and pricing custom orders as a percentage of sales volume
for the period.
Order Management Costs, Return Specific
Order Management Costs, Return Specific
Order Fulfillment Costs
Overhead costs associated with order processing including inventory allocation, scheduling, reporting
and shipment documentation as a percentage of sales revenue.
On Time In Full, Commit Date
Number of orders for which not all of the items on order are delivered in the quantities requested,
meaning that we will count the deviance, and return how many customer orders that where not
delivered in full during a specific time period per the supplier commit date.

On Time In Full, Request Date

Number of orders for which not all of the items on order are delivered in the quantities requested,
meaning that we will count the deviance, and return how many customer orders that where not
delivered in full during a specific time period per the customer request date.
Number & Value of surplus / obsolete stock
Number & value of surplus / obsolete stock at the end of the month.

Stock Status (Number & value of Stock Items)

Value of stock at the end of the month. May be detailed in stock per Main / Sub Groups.
Inbound Volume Received
This KPI measures actual inbound volume received
Value of Items last transaction > than given period
Value of Items last transaction > than given period (say 1 year). This will measure the amount of
potentially obsolete inventories
Order to activation time by major process
Order to activation time by major process.
Cost of Fulfillment Process
Cost of Fulfillment Process.
Unit Cost of Fulfillment
Unit Cost of Fulfillment.
Mean Time to Handle Defects or Rework from Order to Activation
Mean Time to Handle Defects or Rework from Order to Activation
Total Logistic Efficiency
Total Logistic cost per unit of sales volume (i.e.: per Liter; per Ton; etc)

Receiving errors
Number of receiving errors by volume
Average time in inventory
Average time that items are in inventory.
Average dock-to-stock time for handling
Average dock-to-stock time for handling.
Stock in excess of next 60 days needs
Stock in excess of next 60 days needs.
Rate of customers returns or billing disputes due to products shipped but not ordered
Rate of customers returns or billing disputes due to products shipped but not ordered.
Average number of days open of orders
Average numbers of days open of orders.
Average handling cost per order
Average handling cost per order
Average overdue time of orders
Average overdue time of orders.
Average handling time of orders
Average handling time of orders.
Average closure duration of orders
Average closure duration of orders.
Closure duration rate of orders
This KPI monitors the average spent duration of orders closed relative to the average allowed duration of
those orders closed in a given time frame.

Queue rate of orders

The number of orders closed, relative to the number of orders opened in a given time period. So if the
actual value for this KPI is less than 1, the volume of orders in the backlog is growing.
Average number of orders per handler
Average number of orders per handler.
Number of inaccurate business forecast inputs provided
No. of times business forecast has failed due to some wrong information provided in the historical
database.
% of orders with all data fields completed
Percentage of orders with all data fields completed.
% of orders with all planning data completed
Percentage of orders with all planning data completed.
% of orders remaining in 'Request' status
Percentage of orders remaining in Request status.
% of orders remaining in 'Plan' status
Percentage of orders remaining in Plan status.
% of orders with schedule date earlier or equal to late finish date
Percentage of orders with schedule date earlier or equal to late finish date.
% of orders with 'Delay' status
Percentage of orders with Delay status.
% of orders with 'Delay' status due to unavailability of resources
Percentage of orders with Delay status due to unavailability of resources.
% of orders with 'Delay' status due to unavailability of manpower
Percentage of orders with Delay status due to unavailability of manpower

% of orders with 'Delay' status due to unavailability of equipment

Percentage of orders with Delay status due to unavailability of equipment.
% of orders with 'Delay' status due to unavailability of services
Percentage of orders with Delay status due to unavailability of (third party) services.
% of orders closed with all data fields completed
Percentage of orders closed with all data fields completed.