Automotive Sector

Inventory Management and Just-in-Time Key Performance Indicators

Key to the success of an agile supply chain is the speed and flexibility with which these activities can be accomplished and the realization that customer needs and customer satisfaction are the very reasons for the network itself to exist. Achieving agility starts with the physical flow of parts, from the point of supply, through the factory, and shipment through agile distribution channels.

The main logistics and SCM KPI to measure supply chain agility is inventory turns. Inventory turns can be defined as how many times a year the average inventory for a firm changes, or is sold. This ratio is a common industry standard KPI in inventory management performance analysis.

In Manufacturing inventory management, it is important to distinguish between raw materials ratios (the inventory of products coming from suppliers), and finished goods ratios (the inventory of products ready to be shipped); inbound and outbound products being indeed quite different, data will therefore be presented on different graphs for each subsequent sub-sector.