45+ Inventory Management KPI Examples

Inventory management isn't just about counting items on shelves. In our modern, dynamic marketplace, it's a strategic ballet – a balance between supply and demand, ensuring that products are available when and where customers want them, without tying up excess capital in stock. When executed effectively, inventory management becomes the silent maestro of a harmonious supply chain, driving profitability, sustainability, and customer satisfaction.

Inventory Management illustration

Deciphering Inventory KPIs

At its core, inventory is a narrative, telling the tale of a product's journey from supplier to consumer. Key Performance Indicators (KPIs) translate this narrative into a language businesses can understand and act upon. For someone not deeply entrenched in numbers, it might seem overwhelming, but when deciphered, these metrics are simply the pulse points of a company's inventory health. They can illuminate the nuances of turnover rates, shed light on stockout risks, and highlight opportunities to optimize warehousing costs.

The Strategic Dimension of Inventory KPIs

Inventory isn't static; it's a flowing, dynamic entity that requires agile management. Strategic inventory KPIs help businesses anticipate market shifts, making them proactive rather than reactive. This is about not just minimizing holding costs but maximizing service levels and ensuring that the voice of the customer echoes through the supply chain. It's a delicate equilibrium between having enough and having too much, and the right KPIs act as the fulcrum.

In today's complex supply chain landscape, every department from purchasing to sales should understand inventory metrics. This cross-functional synergy ensures alignment, facilitates swift decision-making, and nurtures a culture of continuous improvement.

Tailoring the Right KPIs for Your Inventory Objectives

The uniqueness of each business, influenced by its goals, supply chain intricacies, and market landscape, means there's no universal set of inventory KPIs. But certain tenets can guide your selection:

On KPI Examples, the community offers a beacon, marking out the most pertinent KPIs for inventory management. It's a space where professionals from across the globe converge, sharing insights and upvoting the KPIs resonating most with the challenges and opportunities they face.

Most Popular Inventory Management KPIs for 2024

Delve into the inventory KPIs that industry professionals have flagged as indispensable. Understand their nuances, calculations, and applications in depth.

Stockouts in Period #

The number of times stock was unavailable when requested in a specific period. Frequent stockouts can lead to lost sales and decreased customer satisfaction.


Total Stockouts in Period


If stock was unavailable 10 times in a month, there were 10 stockouts.

Rate of Correctly Picked Line Items %

The percentage of items correctly picked from inventory for order fulfillment. Higher percentages indicate effective picking processes and reduced errors.


(Number of Correctly Picked Items / Total Items Picked) x 100


If 980 out of 1000 items are picked correctly, the rate is 98%.

Inventory Shrinkage as Percentage of Inventory Value %

Represents the reduction in the recorded inventory value that is not accounted for by sales. This includes theft, damage, miscounts, and other losses. Understanding shrinkage helps businesses adjust security measures, refine inventory processes, and improve profitability.


(Value of Lost Inventory / Initial Inventory Value) x 100


If the initial inventory value was $50,000 and the value of lost inventory is $1,000, the shrinkage rate is 2%.

Inventory Turnover #

This KPI measures how often an organization's inventory is sold and replaced over a given period. A high turnover indicates efficient inventory management and sales processes, while a low turnover might mean poor sales or excessive inventory.


Cost of Goods Sold / Average Inventory


If the cost of goods sold is $1,000,000 and average inventory is $200,000, the inventory turnover is 5 times.

Economic Order Quantity #

EOQ provides the ideal order quantity to minimize costs related to order, holding, and shortage costs. It's foundational for efficient inventory management.


Square Root of [(2 x Demand x Order Cost) / Holding Cost]


For an annual demand of 1200 units, order cost of $5, and holding cost of $2 per unit, the EOQ is about 49 units.

A Comprehensive Dive into Inventory KPIs

Explore an exhaustive list of inventory management KPIs. Each metric is paired with a succinct summary, but don't stop there – click on any KPI to unlock its complete story, formula, and real-world application.

Costs & Value

Demand Forecasting

Efficiency & Performance

Inventory Accuracy & Integrity

Safety, Risk & Waste Management

Stock Levels & Turnover

Supplier Performance

Technology & Modern Methods

Final Thoughts

In an era where the supply chain is both a challenge and a competitive differentiator, inventory management stands at its heart. Harnessing the right KPIs offers not just visibility but foresight, allowing businesses to maneuver with agility and precision. As we navigate the intricacies of 2024, let these metrics be your compass, guiding you towards supply chain excellence and stellar customer satisfaction.

Keen on exploring KPIs across other domains? Dive into our expansive category list and let data sculpt your success narrative.