Materials Management KPIs List

Inventory Management KPIs assist businesses to track and manage inventory in order to improve purchasing and production processes, cash flow cycle, and profitability.

Inventory Control

The inventory control office supervisor is in charge of proper storage and supervision of supplies in company retailing, warehousing, and storage properties.

Related: Materials Management Clerk, Supply Technician, Inventory Control Manager, Shelf Life Manager, Inventory Management Specialist

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  • Materials Handling Damage – The percentage of the materials spoiled in the inventory handling and storage procedure out of COGS versus the total financial cost of inventory
  • Warehouse Capacity Use Rate – The percentage of storage volume in a specific storage center that is actively being utilized versus the total storage volume in that area
  • Equipment/Forklift Capacity Use Rate – The percentage of time during which machineries are utilized versus the total amount of time scheduled for use
  • Honeycomb Percentage – The percentage of actual cube utilization versus the total storage house cube areas available
  • Inventory Days of Supply – The number of days for which existent inventory will meet demand
  • Inventory Count Accuracy – The correctness (by area and quantity) of the physical inventory versus the declared inventory
  • Average Component/Material Shelf Life – The average amount of time (in days) that parts or materials are kept in the firm’s storage center before use in the manufacturing or production procedure
  • Component Picking Cycle Time – The average of time (in hours) needed to collect materials and parts needed to start the manufacturing or production of an order

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Inbound Logistics

The inbound logistics office supervisor is in charge of providing prompt and effective delivery of purchased materials.

Related: Logistics Analyst, Logistician, Receiving Specialist

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  • Percentage of Supplier Orders Received with Correct Documentation – The percentage of purchases received with the appropriate documentation given by suppliers versus the total number of purchases obtained from suppliers.
  • Percentage of Supplier Orders Received Damage Free – The percentage of purchase agreements obtained from suppliers that have no defects versus the total number of orders obtained from suppliers.
  • Dock-to-Stock Cycle Time – The total time (in hours) transpired from the arrival of merchandise from the supplier to when those merchandises are kept in the storage house and entered into the inventory control system.
  • Lines Received and Put Away per Hour – The average number of lines handled and stored per hour in the receiving department divided by the number of employees involved in that task.
  • On-Time Receipts from Supplier – The percentage of shipments accepted from a supplier on the date requested versus the total number of shipments received from suppliers.
  • Materials Order Cycle Time – The average amount of time (in days) transpired between the submission of an order from a supplier up to the time it arrives at its prearranged destination
  • Component Tracking – A yes/no metric showing that one or more procedures (manual stocking, labeling, color coding) are employed to monitor material parts.
  • Data Storage – The duration for which the firm stores material data in the material monitoring system.
  • Supplier Orders Productivity – The average number of supplier purchase agreements handled every hour divided by the number of staff members handling orders.
  • Percentage of Component Parts Tracked – The percentage of material parts that the firm monitors in the system versus the total number of material parts utilized.

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Quality Control

The quality control office supervisor inspects raw materials and components received from suppliers for irregularities and deficiencies from specifications

Related: Quality Control Inspector, Material Inspector, Quality Assurance Specialist

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  • Order Picking Accuracy – The percentage of orders accurately prepared versus the total number of orders prepared.
  • Average Order Cycle Time – The average time (in days) transpired between submission of the order by the client and receipt of order by the client.
  • Acceptance Rate of In-Process Products – The percentage of in-process merchandise authorized by QM on the first inspection versus the total number of in-process merchandise.
  • Customer Requirement Review – A yes/no metric showing whether the merchandise is inspected against pre-set client specification during the in-process phase of manufacturing.
  • First Pass Yield (FPY) – The percentage of items that pass through the production procedure without any alteration or repairs for damages versus the total number of items created (also known as throughput yield (TPY)).
  • Shipped Complete per Customer Order – The percentage of orders transported with all lines and units as specified by the client versus the total number of orders transported.
  • Reinspection – A yes/no metric showing whether the firm tries to repair and review noncompliant products during the last phase of manufacturing.
  • Percentage of Orders Requiring Rework – The percentage of orders that need more work after the first preparation and packaging procedure versus the total number of orders.
  • Internal Order Cycle Time – The average time (in days) transpired between submission of order by the client and shipping of orders by the supplier.
  • Acceptance Rate of Finished Goods – The percentage of all manufactured finished products certified by Quality Management staff on the initial inspection versus the total number of finished products.
  • On-Time Delivery Rate – The percentage of orders that arrive at their specified destination at the scheduled time versus the total number of orders transported.

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Key Performance Indicators (KPIs) for the Inventory department are a vital means of ensuring materials department efficiencies and organizational success. If the organization has no stock to sell or raw materials with which to manufacture products, the organization will cease to exist. Thus, it is critical to measure key performance areas like inventory control and management, inbound logistics, and quality control.

Real-time tracking plays a vital role in the management of these three areas, and they can be broken down further into orders received metrics, orders dispatched, order time cycle, component tracking, quality of raw materials acquired, and acceptance rate of goods received.

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