{"id":28057,"date":"2025-07-16T10:05:26","date_gmt":"2025-07-16T10:05:26","guid":{"rendered":"https:\/\/www.hashmicro.com\/ph\/blog\/?p=28057"},"modified":"2026-03-30T09:54:26","modified_gmt":"2026-03-30T09:54:26","slug":"inventory-management-kpi","status":"publish","type":"post","link":"https:\/\/www.hashmicro.com\/ph\/blog\/inventory-management-kpi\/","title":{"rendered":"Top Inventory Management KPIs Every Business Should Track"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Tracking your inventory KPIs is not just about counting what\u2019s in stock. Instead, it\u2019s about understanding the numbers that quietly make or break your margins. Inventory management KPIs help you adjust to demand shifts and stay in control of every unit moving in or out. Most businesses don\u2019t realize they\u2019re losing money on inventory until it\u2019s too late. Expired items, missed sales, or overstocked shelves that collect dust.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The right KPIs show where the gaps are and what actions to take, from sales trends to supplier performance. Tracking these metrics becomes much easier with a system built to do it for you. This article will walk you through essential inventory KPIs, how to measure them, and how the right tools can help you track them effortlessly.<\/span><\/p>\n<table style=\"border-collapse: collapse; background-color: #fffacd; border-radius: 25px 25px 25px 25px;\" width=\"100%\">\n<tbody>\n<tr>\n<td style=\"padding: 15px; border: none;\">\n<h3 style=\"margin-bottom: 10px;\"><span style=\"background-color: #990000; color: #ffffff; padding: 5px;\"><b>Key Takeaways<\/b><\/span><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><a href=\"#a\">Inventory KPIs reveal<\/a> critical insights like sales trends, stock accuracy, and operational efficiency that directly impact profitability.<\/li>\n<li style=\"font-weight: 400;\"><a href=\"#b\">Key metrics span across<\/a> sales, receiving, operations, and employee performance, helping businesses identify gaps and streamline processes.<\/li>\n<li style=\"font-weight: 400;\"><a href=\"#c\">Choosing and tracking the<\/a> right KPIs requires alignment with business goals, clear implementation, and the right tools to measure progress.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span data-sheets-root=\"1\"><div id=\"toc_group_article\" style=''>\r\n\t<p style='font-size:25px;font-weight:bold; margin-bottom:0px'>\r\n\t\tTable of Contents\r\n\t<\/p>\r\n\t<ul id=\"list_toc\" class='list_toc'><\/ul>\r\n<\/div>\r\n\r\n<div id=\"placeholder-toc\"><\/div>\r\n<div id=\"toc\">\r\n    <div class=\"header\">\r\n\t<span class=\"toc-title\" id=\"toc-title\">Content Lists<\/span>\t\r\n\t <i class=\"toc-icon\">\r\n        <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"30\" height=\"30\" viewBox=\"0 0 24 24\" fill=\"none\" stroke=\"#000\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\" class=\"header-icon\">\r\n          <path d=\"m6 9 6 6 6-6\" \/>\r\n        <\/svg>\r\n      <\/i>\r\n\t<\/div>\r\n    <div class=\"list\">\r\n      <ul id=\"toc-list\"><\/ul>\r\n    <\/div>\r\n <\/div>\r\n\r\n<style>\r\n\/* Simple styling for the TOC *\/\r\n\t\r\n\t#toc ul li:last-child {\r\n    padding-bottom: 16px; \/* Adjust the value as needed *\/\r\n}\r\n\r\n.td-fix-index {\r\n\t transform: unset !important;\r\n     -webkit-transform: unset !important; \r\n}\r\n.footer-contact .td-fix-index {\r\n\t transform: translateZ(0) !important;\r\n     -webkit-transform: translateZ(0) !important; \r\n}\r\n\t.tdb_single_content .tdb-block-inner.td-fix-index{\r\n\t\tposition: static;\r\n\t}\r\n\t\r\n\r\n\t\r\n#toc {\r\n  background-color: #FFF;\r\n\tpadding: 17px 24px 20px 24px !important;\r\n  margin-bottom: 20px;\r\n\/*   border: 1px solid #9C171E; *\/\r\n  border-radius: 6px;\r\n\tdisplay: none;\r\n  max-width: 100%;\r\n  transition: .4s ease height;\r\n\tmargin-left: 0;\r\n\toverflow: hidden;\r\n}\r\n\r\n#toc .header{\r\n  display: flex;\r\n  align-items: center;\r\n  justify-content: space-between;\r\n\tbackground-color: transparent;\r\n}\r\n\t\r\n\t#toc.sticky .header{\r\n\t\tpadding: 4px 0;\r\n\t}\r\n\t\r\n.header p{\r\n  font-size: 18px !important;\r\n  font-weight: 600 !important;\r\n  color: #393939;\r\n   margin-bottom: 0;\r\n  \/* margin-top: 20px; *\/\r\n}\r\n\r\n.toc-icon{\r\n  float: right;\r\n\/*   visibility: hidden; *\/\r\n}\r\n\r\n\t.toc-title{\r\n\t\tmargin-right: auto;\r\n\/* \t\tpadding-left: 20px; *\/\r\n\t\tfont-weight: 600;\r\n\t\talign-self: center;\t}\t\r\n\r\n#toc ul {\r\n  list-style-type: none;\r\n  padding-left: 0;\r\n  padding-top: 20px;\r\n  margin-top: 0px;\r\n}\r\n\t\r\n#toc.sticky ul{\r\n\toverflow-y: auto;\r\n\tmax-height: 250px;\r\n\tmargin-top: 0px;\r\n\tpadding-top: 20px;\r\n\/* \tborder-top: 1px solid #d3d3d3; *\/\r\n}\r\n\t\r\n#toc ul li {\r\n\/*   margin-bottom: 10px; *\/\r\n  margin-bottom: 10px;\r\n\tmargin-left: 0;\r\n\ttransition: .2s ease;\r\n\tcursor: pointer;\r\n}\r\n\t\r\n\t#toc.sticky ul li {\r\n\t  margin-right: 10px;\r\n\t}\r\n\t\r\n.td-post-content #toc-list li a:hover, .td-post-content #toc-list a.active{\r\n\tbackground-color: #FFF;\r\n\/* \tpadding: 8px 16px 8px 16px; *\/\r\n\tpadding: 4px 16px 4px 16px;\r\n\tborder-radius: 6px;\r\n\tcolor: #9c171e !important;\r\n\tfont-weight: 600 !important;\r\n}\r\n\t\r\n\t.td-post-content #toc-list li:hover a, .td-post-content #toc-list a.active{\r\n\t\tcolor: #9C171E !important;\r\n\t\tfont-weight: 600 !important;\r\n\t}\r\n\t\r\n.td-post-content #toc-list a.active{\r\n\tfont-weight: bold !important;\r\n\tcolor: #9C171E !important;\r\n}\r\n\t\r\n#toc a, .td-post-content #toc-list a {\r\n  text-decoration: none;\r\n  color: #ea1717 !important;\r\n  transition: .2s ease;\r\n\tfont-weight: 400 !important;\r\n\tdisplay: block;\r\n\t\r\n\tpadding: 4px 16px 4px 0;\r\n}\r\n\r\n#toc.sticky {\r\n  position: fixed;\r\n\/*   top: 73px; *\/\r\n\tbottom: 0;\r\n  z-index: 100; \r\n  box-shadow: 0 2px 5px rgba(0,0,0,0.1); \r\n\twidth: 100%; \r\n\tbackground-color: #FFF;\r\n\/* \tbackground-color: #FFF1F1; *\/\r\n\tborder-bottom: 1px solid #ea1717;\r\n\/*   border: 1px solid #393939; *\/\r\n  box-shadow: 0px 0px 14px 0px #00000040;\r\n  cursor: pointer;\r\n\tanimation: fadein .3s ease;\r\n\tpadding: 12px 16px !important;\r\n}\r\n\t\r\n\t.fadein{\r\n\t\tanimation: fadein .3s ease;\r\n\t}\r\n\t\r\n\t.fadeout{\r\n\t\tanimation: fadeout .3s ease;\r\n\t}\r\n\t\r\n\t\r\n\t@keyframes fadein{\r\n\t\t0% {\r\n\t\t\topacity: 0;\r\n\t\t}\r\n\t\t100%{\r\n\t\t\topacity: 1;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@keyframes fadeout{\r\n\t\t0% {\r\n\t\t\topacity: 1;\r\n\t\t}\r\n\t\t100%{\r\n\t\t\topacity: 0;\r\n\t\t}\r\n\t}\r\n\r\n\t\r\n#toc.sticky .header p{\r\n\tmargin-bottom: 10px;\r\n\tmargin-top: 10px;\r\n}\r\n\r\n#toc.sticky .toc-icon{\r\n  visibility: visible;\r\n\/* \ttransition: 0.4s ease; *\/\r\n}\r\n\t\r\n\t.toc-icon{\r\n\t\talign-items: center;\r\n    \tdisplay: flex;\r\n\t}\r\n\t\r\n\tsvg.header-icon{\r\n\/* \t\tbackground-color: #9c171e; *\/\r\n\t\tbackground-color: #FFF;\r\n\t\tborder-radius: 30px;\r\n\t\tpadding: 5px;\r\n\t}\r\n\r\n#toc.sticky .list{\r\n\/*   max-height: 0; *\/\r\n  transition: height 0.4s ease;\r\n}\r\n\t\r\n\t#toc .list{\r\n\/*   max-height: 0; *\/\r\n  transition: height 0.4s ease;\r\n}\r\n\r\n#toc .header.active .toc-icon{\r\n\ttransform: rotate(0deg); \r\n\topacity: 1;\r\n}\r\n\r\n\t#toc .header.active + .list {\r\n\t  max-height: 200px; \/* Adjust this value as needed *\/\r\n\t  opacity: 1;\r\n\t}\r\n\t\r\n\t#placeholder-toc{\r\n\/* \t\tdisplay: none; *\/\r\n\t}\r\n\t\r\n\t@media (min-width: 768px) and (max-width: 991px){\r\n\t\t#toc.sticky{\r\n\/* \t\t\ttop: 104px; *\/\r\n\t\t\tbottom: 0px;\r\n\t\t}\r\n\t\t\r\n\t\t#toc{\r\n\t\t\twidth: unset !important;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@media (max-width: 767px){\r\n\t\t#toc{\r\n\t\t\twidth: 100% !important;\r\n\t\t\tdisplay: inline-block;\r\n\t\t}\r\n\t\t\r\n\t\t#toc.sticky{\r\n\t\t\twidth: 84% !important;\r\n\/* \t\t\ttop: 81px; *\/\r\n\t\t\tbottom: 60px;\r\n\t\t\tmargin-left: auto;\r\n\t\t\tmargin-right: auto;\r\n\t\t\tpadding: 0 16px;\r\n\/* \t\t\tright: 5%; *\/\r\n\t\t}\r\n\t}\r\n<\/style>\r\n\r\n<style>\r\n\t#list_toc li {margin-bottom: 0;margin-top: 5px;}\r\n\t#list_toc > li > ul {padding-left: 20px;margin-bottom: 0;}\r\n\t#list_toc{height:max-content;transition:ease-in-out}\r\n\t#list_toc li {margin-bottom: 0;margin-top: 5px;}\r\n\t#list_toc_float li.active > a {color:#b1252d;background: #ffe1e3;}\r\n\t#list_toc_float li a {padding:3px 7px}\r\n\t#list_toc_float li a {\r\n\t\tdisplay: block;\r\n\t\tcolor:#000;\r\n\t\tmargin-bottom: 10px;\r\n\t\ttransition:all 0.2s ease-in-out;\r\n\t\tfont-size:15px\r\n\t}\r\n\t#list_toc_float li{list-style:none;list-style-position:inside; margin-left:0;}\r\n\t#list_toc_float a:hover{color:#b1252d;}\r\n\t\r\n\t#list_toc_float li a{margin-bottom:0px}\r\n\t#toc_group_float{\r\n\t\tline-height: 24px;\r\n\t\tmax-height: calc(100vh - 100px);\r\n\t\toverflow: auto;\r\n\t\tz-index: 99;\r\n\t\tdisplay:none!important;\r\n\t\tbackground:#fff;\r\n\t\ttransition:all 0.5s linear\r\n\t}\r\n\t\r\n\t@media (min-width:1019px){\r\n\t\t#toc_group_float {\r\n\t\t\tdisplay:block!important;\r\n\t\t\t}\r\n\t\t\t\t#toc_group_article {\r\n\t\t\tdisplay:none;\r\n\t\t}\r\n\t}\r\n\t\r\n\t@media (max-width:768px){\r\n\t\t#toc_group_article {\r\n\t\t\tdisplay:none;\r\n\t\t}\r\n\t}\r\n\t\r\n\t \/* custom scrollbar style *\/\r\n::-webkit-scrollbar {\r\n    width: 7px;\r\n}\r\n::-webkit-scrollbar-track {\r\n    background: #d7a2a4;\r\n}\r\n::-webkit-scrollbar-thumb {\r\n    background: #b1252d;\r\n    border-radius: 15px;\r\n}\t\t\r\n\r\n<\/style>\r\n\r\n<script>\r\n\tdocument.addEventListener('DOMContentLoaded', function() {\r\n\t\t\/\/ Function to handle click on all <a> elements with href starting with #\r\n\t\tfunction handleTitleClick(event) {\r\n\t\t\tevent.preventDefault();\r\n\t\t\tconst targetId = this.getAttribute('href').substring(1);\r\n\t\t\tconst targetElement = document.getElementById(targetId);\r\n\r\n\t\t\tif (targetElement) {\r\n\t\t\t\tconst headerHeight = document.querySelector('#toc .header').offsetHeight;\r\n\t\t\t\tconst navbarHeight = document.getElementById('tdi_34') ? document.getElementById('tdi_34').offsetHeight : 0;\r\n\t\t\t\tconst windowHeight = window.innerHeight;\r\n\t\t\t\tconst targetOffset = targetElement.offsetTop;\r\n\t\t\t\tconst scrollTo = targetOffset + (windowHeight \/ 2) + (headerHeight) - navbarHeight - 40;\r\n\r\n\t\t\t\twindow.scrollTo({\r\n\t\t\t\t\ttop: scrollTo,\r\n\t\t\t\t\tbehavior: 'smooth'\r\n\t\t\t\t});\r\n\t\t\t}\r\n\t\t}\r\n\r\n\t\t\/\/ Add event listener for all <a> elements in toc-list and list-toc\r\n\t\tconst titleLinks = document.querySelectorAll('#toc-list a, #list_toc a');\r\n\t\ttitleLinks.forEach(link => {\r\n\t\t\tlink.addEventListener('click', handleTitleClick);\r\n\t\t});\r\n\t});\r\n<\/script>\r\n\r\n<!-- ToC List for mobile -->\r\n<script>\r\n \/\/ Generate TOC based on headings\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  \/\/ Get the element that will contain the TOC\r\n  const tocList = document.getElementById('toc-list');\r\n\r\n  \/\/ Get the element with class 'td-post-content'\r\n  const article = document.querySelector('.td-post-content');\r\n\r\n  \/\/ Find all h2 elements within the article\r\n  const headers = article.getElementsByTagName('h2');\r\n\r\n  \/\/ Loop through the h2 elements and create a list item for each one\r\n  for (let i = 0; i < headers.length; i++) {\r\n    const header = headers[i];\r\n    const headerText = header.textContent;\r\n\/\/     const headerId = 'header-' + i;\r\n    const headerId = headerText\r\n    .toLowerCase()\r\n    .trim()\r\n    .replace(\/[^\\w\\s-]\/g, '')  \/\/ hapus tanda baca\r\n    .replace(\/\\s+\/g, '-'); \/\/ ganti spasi jadi \"-\"\r\n\r\n    \/\/ Set an ID for the header if it doesn't have one\r\n    header.setAttribute('id', headerId);\r\n\r\n    \/\/ Create a list item for the TOC\r\n    const listItem = document.createElement('li');\r\n\r\n    \/\/ Create a link for the list item\r\n    const link = document.createElement('a');\r\n    link.setAttribute('href', '#' + headerId);\r\n    link.textContent = headerText;\r\n\r\n    \/\/ Append the link to the list item\r\n    listItem.appendChild(link);\r\n\r\n    \/\/ Append the list item to the TOC list\r\n    tocList.appendChild(listItem);\r\n  }\r\n});\r\n\r\n\/\/ Keep height and placement of content using placeholder in place of TOC\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  const toc = document.querySelector('#toc');\r\n  const placeholderToc = document.querySelector('#placeholder-toc');\r\n\r\n  function setPlaceholderHeight() {\r\n    placeholderToc.style.height = `${toc.offsetHeight}px`;\r\n  }\r\n\r\n  \/\/ Set the initial height of the placeholder\r\n  setPlaceholderHeight();\r\n\r\n  \/\/ Update the height on window resize\r\n  window.addEventListener('resize', setPlaceholderHeight);\r\n});\r\n  const tocTitle = document.querySelector('#toc-title');\r\n\r\n\/\/ Sticky TOC and update heading\r\ndocument.addEventListener(\"DOMContentLoaded\", function() {\r\n  const toc = document.querySelector('#toc');\r\n  const footer = document.querySelector('.td-footer-template-wrap');\r\n  const tocParent = toc.parentElement;\r\n  const divTop = tocParent.getBoundingClientRect().top + window.pageYOffset;\r\n  const tocHeight = toc.offsetHeight;\r\n  const triggerPoint = divTop + tocHeight + 700;\r\n  const footerHeight = footer.offsetHeight;\r\n  const triggerFooterPoint = footer.getBoundingClientRect().top + window.pageYOffset - footerHeight - footerHeight - footerHeight;\r\n  const phtoc = document.querySelector('#placeholder-toc');\r\n  const headers = document.querySelectorAll('.td-post-content h2');\r\n  const navLinks = document.querySelectorAll('#toc-list a');\r\n\t\r\n\tconst panel2 = document.querySelector(\"#toc .list\");\r\n\tvar icon = document.querySelector(\".toc-icon\");\r\n\r\n  let activeLink = null; 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They provide insights into turnover rates, sales performance, demand trends, cost efficiency, operational effectiveness, and supplier relationships.<\/p>\n<p>However, there are numerous KPIs that a company must track. In order to make it a job well done, <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/best-inventory-management-software\/\">inventory monitoring tools<\/a>\u00a0makes it simple to track these KPIs. They help identify progress, highlight successful areas, and pinpoint processes that need improvement.<\/p>\n<style>\r\n    #custom-quote {\r\n        background-color: #f0f0f0;\r\n        padding: 20px;\r\n        border-radius: 12px;\r\n        margin: 20px;\r\n        display: flex;\r\n        flex-direction: column;\r\n    }\r\n\r\n    #custom-quote .quote-body {\r\n        display: flex;\r\n        flex-direction: row;\r\n        align-items: flex-start;\r\n        gap: 15px;\r\n        font-size: 16px;\r\n        line-height: 1.5;\r\n        font-style: italic;\r\n    }\r\n\r\n    #custom-quote .quote-icon {\r\n        width: 40px;\r\n        height: 40px;\r\n        flex-shrink: 0;\r\n    }\r\n\r\n    #custom-quote .quote-author-wrapper {\r\n        margin-top: 15px;\r\n        align-self: flex-start;\r\n        margin-left: 55px; \r\n\t\tmargin-bottom: 0px;\r\n    }\r\n\r\n    #custom-quote em {\r\n        font-family: 'Roboto Serif', serif !important;\r\n        font-size: 12px;\r\n        font-weight: bold;\r\n        font-style: normal;\r\n    }\r\n\r\n    @media screen and (max-width: 768px) {\r\n        #custom-quote {\r\n            margin: 15px 0;\r\n            padding: 15px;\r\n        }\r\n        \r\n        #custom-quote .quote-body {\r\n            gap: 12px;\r\n        }\r\n\r\n        #custom-quote .quote-author-wrapper {\r\n            margin-left: 52px;\r\n        }\r\n    }\r\n\r\n    @media screen and (max-width: 480px) {\r\n        #custom-quote {\r\n            margin: 10px 0;\r\n            padding: 12px;\r\n        }\r\n\r\n        #custom-quote .quote-body {\r\n            font-size: 14px;\r\n            gap: 10px;\r\n        }\r\n\r\n        #custom-quote .quote-icon {\r\n            width: 32px;\r\n            height: 32px;\r\n        }\r\n\r\n        #custom-quote .quote-author-wrapper {\r\n            margin-top: 10px;\r\n            margin-left: 42px;\r\n        }\r\n    }\r\n<\/style>\r\n\r\n<div id=\"custom-quote\">\r\n    <div class=\"quote-body\">\r\n        <img decoding=\"async\" src=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/12\/quote.webp\" alt=\"Quote Icon\" class=\"quote-icon\">\r\n        <div>\r\n            It is wrong to suppose that if you can\u2019t measure it, you can\u2019t manage it \u2013 a costly myth.        <\/div>\r\n    <\/div>\r\n    <p class=\"quote-author-wrapper\">\r\n        <em>W. Edwards Deming, The New Economics<\/em>\r\n    <\/p>\r\n<\/div>\n<h2><b><span id=\"b\">Inventory Metrics: Sales KPIs<\/span><\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-33762\" src=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Sales-KPIs.webp\" alt=\"Inventory metrics\" width=\"800\" height=\"400\" srcset=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Sales-KPIs.webp 800w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Sales-KPIs-300x150.webp 300w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Sales-KPIs-768x384.webp 768w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Sales-KPIs-150x75.webp 150w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Sales-KPIs-696x348.webp 696w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>Sales metrics can give your team a competitive edge and support collaboration and deal-closing efforts.<\/p>\n<h3><b>1. Inventory Turnover Rate<\/b><\/h3>\n<p>Also called inventory turn or turnover ratio, this metric shows how often a business sells and replenishes its stock within a set timeframe, typically one year. It helps assess whether <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/inventory-optimization\/#what-is-inventory-optimization\">inventory levels are aligned<\/a> with actual sales activity. The formula is:<\/p>\n<p><b>Inventory turnover rate = Cost of Goods Sold \u00f7 Average Inventory<\/b><\/p>\n<h3><b>2. Days on Hand (DOH)<\/b><\/h3>\n<p>Also known as Days Sales of Inventory (DSI) or the average age of inventory, this metric measures how long inventory remains unsold, expressed in days. It\u2019s commonly used to analyze short-term performance. Use this formula:<\/p>\n<p><b>Days on Hand = (Average Inventory \u00f7 Cost of Sales) \u00d7 365<\/b><\/p>\n<h3><b>3. Weeks on Hand<\/b><\/h3>\n<p>This metric reflects how many weeks it takes, on average, to sell through inventory. A higher number <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/slow-moving-inventory\/\">indicates slower movement<\/a>, while a lower number shows faster turnover. Formula:<\/p>\n<p><b>Weeks on Hand = (Average Inventory \u00f7 Cost of Sales) \u00d7 52<\/b><\/p>\n<h3><b>4. Stock-to-Sales Ratio<\/b><\/h3>\n<p>This shows how much inventory is held in relation to sales volume. It\u2019s useful for evaluating whether you\u2019re carrying excess stock that might reduce profitability. Here\u2019s the formula:<\/p>\n<p><b>Stock-to-Sales Ratio = Inventory Value \u00f7 Sales Value<\/b><\/p>\n<h3><b>5. Sell-Through Rate<\/b><\/h3>\n<p>This compares the number of items sold to the number<a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/manufacturing-inventory\/\"> received from suppliers or manufacturers<\/a>, helping to evaluate how well inventory moves through the supply chain. Calculate it with:<\/p>\n<p><b>Sell-Through Rate = (Units Sold \u00f7 Units Received) \u00d7 100<\/b><\/p>\n<h3><b>6. Backorder Rate<\/b><\/h3>\n<p>This metric tracks the percentage of customer orders that couldn&#8217;t be fulfilled due to items being out of stock. It reflects how well a business keeps up with demand for its products. To calculate backorder rate:<\/p>\n<p><b>Backorder Rate = (Delayed Orders Due to Backorders \u00f7 Total Orders Placed) \u00d7 100<\/b><\/p>\n<h3><b>7. Forecast Accuracy<\/b><\/h3>\n<p>Also known as demand forecast accuracy, this measures how closely actual inventory levels matched the forecasted amounts. It evaluates how precise your predictions were based on past sales and ordering. Formula:<\/p>\n<p><b>Forecast Accuracy = [(Actual \u2013 Forecast) \u00f7 Actual] \u00d7 100<\/b><\/p>\n<h3><b>8. Rate of Return (RoR)<\/b><\/h3>\n<p>Often called return on investment (ROI), this percentage shows the gain or loss on an investment relative to its original cost. It\u2019s usually measured annually. Here\u2019s the formula:<\/p>\n<p><b>Rate of Return = [(Final Value \u2013 Initial Value) \u00f7 Initial Value] \u00d7 100<\/b><\/p>\n<h3><b>9. Product Sales<\/b><\/h3>\n<p>Also referred to as sales revenue, this metric represents total income from sold products, after subtracting returns, discounts, and allowances. Use this formula:<\/p>\n<p><b>Product Sales = Gross Sales Revenue \u2013 Sales Returns \u2013 Discounts \u2013 Allowances<\/b><\/p>\n<h3><b>10. Revenue per Unit<\/b><\/h3>\n<p>This metric shows how much income is earned from each unit sold. It&#8217;s especially useful for subscription-based or volume-driven businesses. Calculate it with:<\/p>\n<p><b>Revenue per Unit = Total Revenue for the Period \u00f7 Average Units Sold in the Period<\/b><\/p>\n<h3><b>11. Cost per Unit<\/b><\/h3>\n<p>Cost per unit represents how much it costs to produce or acquire one unit of a product. This is ideal for businesses with high production volume. Formula:<\/p>\n<p><b>Cost per Unit = (Fixed Costs + Variable Costs) \u00f7 Number of Units Produced<\/b><\/p>\n<h3><b>12. Gross Margin by Product<\/b><\/h3>\n<p>Gross margin tells you how much profit is made per sale after deducting the cost of goods sold. It reflects how efficiently a product generates income. Use this formula:<\/p>\n<p><b>Gross Margin = [(Net Sales \u2013 Cost of Goods Sold) \u00f7 Net Sales] \u00d7 100<\/b><\/p>\n<h3><b>13. Gross Margin Return on Investment (GMROI)<\/b><\/h3>\n<p>GMROI shows the return earned on inventory investments. It helps assess whether your inventory spending leads to strong profit returns. Calculate it with:<\/p>\n<p><b>GMROI = Gross Margin \u00f7 Average Inventory Cost<\/b><\/p>\n<h2><b>Inventory Metrics: Receiving KPIs<\/b><\/h2>\n<p><a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators.webp\"><img decoding=\"async\" class=\"aligncenter size-full wp-image-28059\" src=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators.webp\" alt=\"Key inventory indicators\" width=\"1200\" height=\"675\" srcset=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators.webp 1200w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-300x169.webp 300w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-1024x576.webp 1024w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-768x432.webp 768w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-747x420.webp 747w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-150x84.webp 150w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-696x392.webp 696w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Key-inventory-indicators-1068x601.webp 1068w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/a>Receiving KPIs, often grouped under warehouse metrics, focus specifically on the efficiency and accuracy of handling incoming stock. While they may overlap with general operational KPIs, these indicators zero in on the receiving phase of inventory management.<\/p>\n<h3><b>1. Time to Receive<\/b><\/h3>\n<p>This metric tracks how long it takes staff to process incoming inventory\u2014from the moment stock arrives to when it\u2019s ready for storage or sale. It helps evaluate the speed and efficiency of your receiving operations. Formula:<\/p>\n<p><b>Time to Receive = Time for Stock Validation + Time to Record Inventory + Time to Prepare for Storage<\/b><\/p>\n<h3><b>2. Put Away Time<\/b><\/h3>\n<p>Put away time measures how quickly received goods are stored in their proper locations. It begins after stock has been validated and recorded. Improving this KPI helps reduce lead time and streamline warehouse flow. Formula:<\/p>\n<p><b>Put Away Time = Total Time to Store Received Inventory<\/b><\/p>\n<h3><b>3. Supplier Quality Index (SQI)<\/b><\/h3>\n<p>SQI evaluates vendor performance across several critical areas, including product quality, responsiveness, and delivery reliability. It combines weighted scores to provide a comprehensive rating of each supplier. Typically tracked monthly and averaged annually. Example formula:<\/p>\n<p><b>Supplier Quality Index = (Material Quality \u00d7 45%) + (Corrective Action \u00d7 10%) + (Prompt Reply \u00d7 10%) + (Delivery Quality \u00d7 20%) + (Quality Systems \u00d7 5%) + (Commercial Posture \u00d7 10%)<\/b><\/p>\n<h2><b>Inventory Metrics: Operational KPIs<\/b><\/h2>\n<p>Operational KPIs help measure how smoothly your business runs on a day-to-day basis. Strong internal performance in these areas often translates to better customer satisfaction and overall efficiency.<\/p>\n<h3><b>1. Lost Sales Ratio<\/b><\/h3>\n<p>This KPI tracks the percentage of the year a product is out of stock compared to its expected sales activity. A high ratio may indicate that inventory levels are too low, leading to missed sales opportunities. Formula:<\/p>\n<p><b>Lost Sales Ratio = (Days Out of Stock \u00f7 365) \u00d7 100<\/b><\/p>\n<h3><b>2. Perfect Order Rate<\/b><\/h3>\n<p>This measures how many orders are shipped without errors\u2014on time, complete, damage-free, and with correct documentation. A high perfect order rate indicates strong operational accuracy and customer satisfaction. Use this formula:<\/p>\n<p><b>Perfect Order Rate = [(On-Time Deliveries \u00f7 Total Orders) \u00d7 (Complete Orders \u00f7 Total Orders) \u00d7 (Damage-Free Orders \u00f7 Total Orders) \u00d7 (Accurate Documentation \u00f7 Total Orders)] \u00d7 100<\/b><\/p>\n<h3><b>3. Inventory Shrinkage<\/b><\/h3>\n<p>This metric reflects the gap between recorded inventory and what\u2019s physically in stock. Shrinkage is often due to theft, damage, or errors, and it can impact profitability. Formula:<\/p>\n<p><b>Inventory Shrinkage = Ending Inventory Value \u2013 Physically Counted Inventory Value<\/b><\/p>\n<h3><b>4. Average Inventory<\/b><\/h3>\n<p>Average inventory calculates the typical amount of stock a business holds over a given period. Maintaining a consistent level helps with planning and avoids overstocking or shortages. Use this formula:<\/p>\n<p><b>Average Inventory = (Beginning Inventory + Ending Inventory) \u00f7 2<\/b><\/p>\n<h3><b>5. Inventory Carrying Cost<\/b><\/h3>\n<p>Also known as holding cost, this metric shows the percentage of inventory value spent on storing products. It includes expenses like warehousing, insurance, labor, and losses from unsellable stock. The total cost varies depending on product type, number of SKUs, storage setup, and turnover rate. Formula:<\/p>\n<p><b>Inventory Carrying Cost = [(Service Costs + Risk Costs + Capital Cost + Storage Cost) \u00f7 Total Inventory Value] \u00d7 100<\/b><\/p>\n<h3><b>6. Customer Satisfaction Score (CSAT)<\/b><\/h3>\n<p>CSAT measures how satisfied customers are with your product or service, usually gathered through short post-purchase surveys. A higher score reflects better customer experience. Formula:<\/p>\n<p><b>Customer Satisfaction Score = (Positive Responses \u00f7 Total Responses) \u00d7 100<\/b><\/p>\n<h3><b>7. Fill Rate<\/b><\/h3>\n<p>Also called line fill rate, this KPI tracks the percentage of customer orders that are fully fulfilled. It\u2019s used to evaluate performance across the entire supply chain. Formula:<\/p>\n<p><b>Fill Rate = [(Total Items \u2013 Unshipped Items) \u00f7 Total Items] \u00d7 100<\/b><\/p>\n<h3><b>8. Gross Margin Percent<\/b><\/h3>\n<p>This shows how much profit remains after subtracting the cost of goods sold from revenue. It\u2019s a key indicator of pricing strategy and cost efficiency. Formula:<\/p>\n<p><b>Gross Margin Percent = [(Total Revenue \u2013 Cost of Goods Sold) \u00f7 Total Revenue] \u00d7 100<\/b><\/p>\n<h3><b>9. Order Cycle Time<\/b><\/h3>\n<p>Also called order timeliness, this measures how long it takes to complete a customer order from placement to delivery. Shorter cycles typically indicate higher operational efficiency. Formula:<\/p>\n<p><b>Order Cycle Time = (Time Order Was Received \u2013 Time Order Was Placed) \u00f7 Total Shipped Orders<\/b><\/p>\n<h3><b>10. Stock-Outs<\/b><\/h3>\n<p>This KPI reflects how often items are unavailable when customers try to order them. Frequent stock-outs can lead to lost sales and reduced customer trust. Use this formula:<\/p>\n<p><b>Stock-Outs = (Items Out of Stock \u00f7 Items Shipped) \u00d7 100<\/b><\/p>\n<h3><b>11. Lead Time<\/b><\/h3>\n<p>Lead time tracks how long it takes from the moment a customer places an order until they receive the product. It reflects the overall responsiveness of your supply chain. To calculate:<\/p>\n<p><b>Lead Time = Order Processing Time + Production Time + Delivery Time<\/b><\/p>\n<h3><b>12. Dead Stock \/ Spoilage<\/b><\/h3>\n<p>Dead stock refers to unsold items that can no longer be sold, often due to low demand or being outdated. Spoilage is similar but applies to perishable goods like food. High percentages of dead or spoiled stock can signal serious inventory issues.<\/p>\n<p>Set clear criteria for what qualifies as \u201cunsellable\u201d (e.g., after a season ends). Use this formula:<\/p>\n<p><b>Dead\/Spoiled Stock = (Unsellable Stock During Period \u00f7 Total Available Stock During Period) \u00d7 100<\/b><\/p>\n<h2><b>Inventory Metrics: Employee KPIs<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-33764\" src=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Employee-KPIs.webp\" alt=\"Inventory metrics employee\" width=\"800\" height=\"400\" srcset=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Employee-KPIs.webp 800w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Employee-KPIs-300x150.webp 300w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Employee-KPIs-768x384.webp 768w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Employee-KPIs-150x75.webp 150w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/Inventory-Metrics-Employee-KPIs-696x348.webp 696w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>Employee KPIs, or labor KPIs, measure how effectively your workforce contributes to business output. They reveal whether your team is working efficiently, contributing to production goals, and generating value for the company.<\/p>\n<h3><b>1. Labor Cost per Item<\/b><\/h3>\n<p>Also called unit labor cost, this KPI shows how much labor expense goes into producing a single unit. It includes wages and any labor-related costs tied to moving the product through production to sale. Formula:<\/p>\n<p><b>Labor Cost per Item = Total Labor Expense \u00f7 Total Units Produced<\/b><\/p>\n<h3><b>2. Labor Cost per Hour<\/b><\/h3>\n<p>This measures how much each working hour costs the company per employee. It\u2019s useful for evaluating the cost-effectiveness of meetings, tasks, or time allocation. Formula:<\/p>\n<p><b>Labor Cost per Hour = (Annual Gross Salary \u00f7 Weeks Worked per Year) \u00f7 Hours Worked per Week<\/b><\/p>\n<h2><b><span id=\"c\">How to Measure KPI in Inventory Management<\/span><\/b><\/h2>\n<p>Every business has different goals, so it&#8217;s important to choose KPIs that align with your needs. Here are some tips to help you select the right ones:<\/p>\n<ul>\n<li><b>Focus on KPIs<\/b> <b>that give useful insights <\/b>and help improve how you manage your inventory.<\/li>\n<li><b>Align your KPIs with your strategic business goals.<\/b> For example, if you&#8217;re running a sari-sari store or a retail chain in Metro Manila and want to improve cash flow or profitability, you might track stock turnover or fast-moving items. Think about the kind of data you&#8217;re missing and the questions your business partners or investors might ask.<\/li>\n<li><b>Don\u2019t just look inward, consider your customers.<\/b> Are they finding the items they need in stock? Tracking customer satisfaction or fulfillment rates can help ensure they come back.<\/li>\n<li>Lastly, check whether <b>your current inventory system can track these KPIs.<\/b> If not, you may need to upgrade or invest in a more capable software that fits your business size and industry.<\/li>\n<\/ul>\n<p>If you <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/periodic-perpetual-inventory-system\/\">think your existing inventory system<\/a> isn\u2019t capable of tracking the metrics in the first place, you might want to consider changing your inventory system for future time and budget-saving. Click the banner below to find out about the pricing:<\/p>\n<h2><b>How to Set Inventory Management KPIs<\/b><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-33765\" src=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/How-to-Set-Inventory-Management-KPIs.webp\" alt=\"Setting inventory management KPI\" width=\"800\" height=\"400\" srcset=\"https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/How-to-Set-Inventory-Management-KPIs.webp 800w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/How-to-Set-Inventory-Management-KPIs-300x150.webp 300w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/How-to-Set-Inventory-Management-KPIs-768x384.webp 768w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/How-to-Set-Inventory-Management-KPIs-150x75.webp 150w, https:\/\/www.hashmicro.com\/ph\/blog\/wp-content\/uploads\/2025\/07\/How-to-Set-Inventory-Management-KPIs-696x348.webp 696w\" sizes=\"(max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>When setting KPIs, it\u2019s important to tailor them specifically to each business unit. Introducing too many new metrics at once can overwhelm your team, so it\u2019s best to start with just a few key indicators per department. Collaborate with department heads to consider:<\/p>\n<ul>\n<li>How daily tasks may shift as a result of the KPI.<\/li>\n<li>Whether the metric drives true improvement, not just faster output.<\/li>\n<li>How staff can use the data to take meaningful action.<\/li>\n<li>If the KPI encourages healthy collaboration or creates unnecessary competition.<\/li>\n<li>Whether it supports the company\u2019s broader mission and goals.<\/li>\n<li>If the metric truly captures the insight you&#8217;re aiming for.<\/li>\n<li>Whether the KPI addresses areas that need real progress.<\/li>\n<li>If the metric can evolve over time. KPIs should be adaptable and refined regularly.<\/li>\n<\/ul>\n<h2><b>Best Practices to Implement Inventory Management KPIs<\/b><\/h2>\n<p>Effective inventory metrics begin with tracking the right factors. Set realistic targets for each metric and avoid overly ambitious or vague goals. KPIs should be practical, and each department should focus on no more than 5 to 7 key indicators.<\/p>\n<p>Once KPIs are defined, support your team to achieve them. Clearly communicate the goals, the desired outcomes, and provide the necessary tools to succeed. Avoid setting goals that are unrealistic or lack a clear action plan. Before introducing new KPIs to your teams, be sure to:<\/p>\n<ul>\n<li>Clearly define and document each metric.<\/li>\n<li>Involve employees in the process so they understand how they\u2019re measured and what\u2019s expected.<\/li>\n<li>Train the relevant teams to use and interpret the metrics.<\/li>\n<li>Align internal processes with the selected KPIs.<\/li>\n<li>Set benchmarks, review them regularly, and adjust when needed.<\/li>\n<li>Use a dashboard to track and visualize progress over time.<\/li>\n<\/ul>\n<p>Nowadays, many companies, including logistic managers and business owners, also use AI inventory management to assist with their daily tasks. The <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/ai-inventory-management\/\">emergence of new AI tools<\/a> promises a more effective, streamlined workflow for all parties involved.<\/p>\n<h2><b>Conclusion<\/b><\/h2>\n<p>Inventory management KPIs help businesses track stock performance, reduce waste, and make data-driven operational decisions. By focusing on the right metrics, companies can improve inventory control and increase long-term profitability.<\/p>\n<p>If you&#8217;re serious about mastering your inventory, don\u2019t settle for spreadsheets or outdated systems; find the <a href=\"https:\/\/www.hashmicro.com\/ph\/blog\/best-inventory-management-software\/\">best inventory management software<\/a> that can make tracking KPIs simpler, faster, and far more accurate.<\/p>\n<h2><strong>FAQ for Inventory Management KPI<\/strong><\/h2>\n<ul class=\"bottom_faq\">\n<li>\n<details open=\"open\">\n<summary><b>What are key points in inventory management?<\/b><\/summary>\n<p><span style=\"font-weight: 400;\">The key points in inventory management include tracking stock accurately, maintaining optimal stock levels, forecasting demand, managing reorder points, and reducing excess or obsolete inventory. Businesses also need clear visibility into stock movement, storage conditions, and supplier lead times to avoid stockouts and deadstock.<\/span><\/p>\n<\/details>\n<\/li>\n<li>\n<details open=\"open\">\n<summary><strong>What are the 5R&#8217;s of inventory management?\u00a0<\/strong><\/summary>\n<p><span style=\"font-weight: 400;\">The 5R\u2019s of inventory management usually refer to having the <\/span><b>right stock<\/b><span style=\"font-weight: 400;\">, in the <\/span><b>right quantity<\/b><span style=\"font-weight: 400;\">, in the <\/span><b>right condition<\/b><span style=\"font-weight: 400;\">, at the <\/span><b>right place<\/b><span style=\"font-weight: 400;\">, and at the <\/span><b>right time<\/b><span style=\"font-weight: 400;\">. This framework helps businesses balance product availability with cost control.<\/span><\/p>\n<\/details>\n<\/li>\n<li>\n<details open=\"open\">\n<summary><strong>What are the 5 KPIs for a warehouse?<\/strong><\/summary>\n<p><span style=\"font-weight: 400;\">Five common warehouse KPIs are <\/span><b>inventory accuracy<\/b><span style=\"font-weight: 400;\">, <\/span><b>order picking accuracy<\/b><span style=\"font-weight: 400;\">, <\/span><b>inventory turnover<\/b><span style=\"font-weight: 400;\">, <\/span><b>order cycle time<\/b><span style=\"font-weight: 400;\">, and <\/span><b>warehouse space utilization<\/b><span style=\"font-weight: 400;\">. These KPIs help businesses measure stock control, speed, efficiency, and storage performance.<\/span><\/p>\n<\/details>\n<\/li>\n<li>\n<details open=\"open\">\n<summary><strong>How to write KPIs in 4 steps?<\/strong><\/summary>\n<p><span style=\"font-weight: 400;\">First, define the business goal you want to achieve. Second, choose a measurable metric that shows progress toward that goal. Third, set a clear target and timeframe. Fourth, review performance regularly and adjust the KPI when business needs change.<\/span><\/p>\n<\/details>\n<\/li>\n<\/ul>\n<p><script type=\"application\/ld+json\">\n{\n  \"@context\": \"https:\/\/schema.org\",\n  \"@type\": \"FAQPage\",\n  \"mainEntity\": [{\n    \"@type\": \"Question\",\n    \"name\": \"What are key points in inventory management?\",\n    \"acceptedAnswer\": {\n      \"@type\": \"Answer\",\n      \"text\": \"The key points in inventory management include tracking stock accurately, maintaining optimal stock levels, forecasting demand, managing reorder points, and reducing excess or obsolete inventory. 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Most businesses don\u2019t realize they\u2019re losing money on inventory until [&hellip;]<\/p>\n","protected":false},"author":14,"featured_media":28058,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[20],"tags":[],"class_list":{"0":"post-28057","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-inventory"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.6 (Yoast SEO v26.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Top Inventory Management KPIs Every Business Should Track<\/title>\n<meta name=\"description\" content=\"Inventory management KPIs are measurable metrics used to monitor stock performance, optimize operations and decision-making.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link 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