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What are the Best Supply Chain KPIS to Track in Your Operation?

Optimizing your supply chain takes time and effort, but having a more efficient, well-balanced supply chain can yield tremendous benefits for the financial prospects of your business. Optimization starts with data and tracking the right supply chain key performance indicators (KPIs).

Unfortunately, in the quest for data supremacy, organizations have a tendency to over-complicate the monitoring of their supply chain performance by tracking too many KPIs. Supply chain KPIs will likely be different based on the business type or industry you’re operating in, but there are a handful of core metrics that are useful to track, regardless of industry. Combined with a premium software dashboard like DATASCOPE , these core supply chain KPIs will help you identify any inefficiencies within your processes, minimize waste, and give you more actionable insights without becoming overwhelmed with data.


Inventory control is perhaps the most critical element of supply chain performance. To enhance overall inventory accuracy, here are 5 of the best supply chain KPIs to track:

  1. Inventory Turnover
  2. Inventory to Sales Ratio
  3. Inventory Days of Supply
  4. Inventory Velocity
  5. Supply Chain Cost vs Sales


Inventory turnover is a measure of how many times your entire inventory gets sold over a specific time period. By dividing the cost of goods sold by the average inventory you have on hand, you’ll get a good idea of how much inventory is lying around waiting to be sold. The higher your turnover rate is, the more efficient your supply chain is likely to be.


The inventory to sales ratio measures how much inventory is for sale versus how much is actually sold. It is easily calculated by dividing inventory for sale by actual amount sold. As this KPI can affect your inventory turnover, it’s important to keep this ratio as consistent as possible.


This will tell you the number of days remaining before you need to replenish your stock. It can be calculated by taking how much inventory you have in stock and dividing by the average daily usage, or demand, for your stock. Taking into account things like customer returns and seasonal variations, this KPI should be measured often in order to find your inventory “sweet spot”.


This KPI is a measure of how much inventory you expect to be consumed over a given time frame and it gives you a good idea of whether your on-hand inventory matches the demand. You can calculate the velocity percentage by taking your opening stock and dividing it by your sales orders forecast for the next period.


This is a commonly used metric that gives you an idea of how much your supply chain management costs compared to the sales you’re making. Whether you want to track the cost of your supply chain as a whole, or the cost of selling a single pallet, this KPI can help you cut costs and establish savings plans to further optimize your supply chain. 


There are dozens of other supply chain KPIs you could be tracking, but to avoid data overload, it’s best to limit tracking to the ones that are the most critical to your operation. Here are a few other important metrics to consider:

  • Gross Margin Return on Investment (GMROI): Divide your gross profit by the average investment in your inventory and you end up with the gross margin ROI. This KPI will give you a great idea of how well you can turn your inventory into cash after covering your inventory costs. A higher GMROI represents higher profits.
  • Perfect Order Rate: The perfect order KPI is an all-encompassing metric that tells you about the success of your orders. This is given as a percentage of orders that are delivered with accurate documentation, on-time and with no damage or losses. For better customer loyalty, fewer returns and lower costs, aim for 100%.
  • Fill Rate: Full rate is an order fulfillment metric that tells you the percentage of your customer’s orders that were filled on the first attempt. Whether you’re tracking the percentage of orders or the percentage of items delivered on the first try, this is a great indicator of customer satisfaction.


Relying on the performance data of people in your operation, not just the processes, is what drives results. However, without the right tools, it’s difficult to compare the performance of workers in your supply chain. For example, how do you know if one picker is performing better than another? By finding and rewarding your top performers and strengthening the weaker links, management can make the necessary interventions to properly incentivize your workforce and change the culture of your organization. If you want to start measuring the right data, eliminate massive inefficiencies, and drive a more competitive, fun environment on your warehouse or factory floor, look no further than DATASCOPE’s  KPI reporting module.

Within the KPI reporting module, in addition to the standard reports and queries, there is also a DRS Report Writer tool that allows you to build fully-customized, easy-to-use reporting dashboards. Built on SQL Server Reporting Services (SSRS), there are a range of Statistical and Alert reports that can be run either ad-hoc or at set times, depending on your business needs. The KPI dashboard screens were developed with large warehouses in mind, allowing you to cycle through the different KPI dashboards, providing you with plenty of data on both worker and warehouse performance. Eventually, these KPIs will be phased out of the software and replaced with a more comprehensive data analysis tool which will be embedded within the DATASCOPE software.

DATASCOPE’s premium software solution gives you the ability to create your own KPIs and customize your KPI dashboard for your specific supply chain operation. To learn more about the features and functionality of the KPI module, please check out our full demo. To try the software yourself, schedule a demo of our software today.

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