Canada/United States Manufacturing Perspective

Inventory Management and Just-in-Time Key Performance Indicators

Key to the success of an agile Lean 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 Lean supply chain agility is inventory turns. Inventory turns can be defined as how many times per year the average inventory for a firm changes, or is sold. This ratio is a common industry standard KPI in inventory management performance analysis^A.

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A: For the purpose of this analysis, 4-digit NAICS codes were used; that level provides the most interesting comparison of sub-sectors.