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KNOWLEDGE LIBRARY

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27Jun

Warehouse Occupancy Percentage

Optimal storage utilization helps enforce healthy inventory management. In our early work with Honda their...

02Jun

Efficient Procurement Inventory

Efficient procurement inventory (EPI) is often required to realize steep discounts when a special opportunity...

02Jun

Inventory Carrying Rate

The inventory carrying rate (ICR) is the percent of the unit inventory value used to...

26Jun

Inventory Activity Profiling & Data Mining

Suppose you were sick and went to the doctor for a diagnosis and prescription.  When...

27Jun

Inventory Performance Measures

Inventory performance measures include financial, productivity , quality, and response time indicators for evaluating the efficiency and...

Inventory Planner Productivity

Financial performance is a symptom of the productivity performance of logistics. The underlying reason for good or poor financial performance is almost always found in the good or poor productivity performance. We must understand productivity metrics to understand total logistics performance analysis.

The productivity of any resource, r, is computed as the ratio of the output of the resource to the consumption of the resource.

Pr = Or/Cr

For example, labor productivity is typically computed as the ratio of labor’s output (normally measured in units or lines per year) to the consumption of labor (normally measured in working hours per year).

Pl = Ol/Cl = units/hour

The productivity of a piece of material handling vehicle, v, is typically measured as the number of loaded trips per available working hour.

Pv = Ov/Cv = trips/hour

The productivity of an inventory planner can be measured in a variety of ways including the number of SKUs per FTE, the number of $s managed per FTE, and/or the number of suppliers managed per FTE.

The productivity of the inventory planners needs to be balanced with their performance in turns and fill rate to make sure that productivity increases don’t come at the expense of turn and fill rate performance.

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