--- layout: default_v3 language: default permalink: digital-analytics/inventory-analytics.html i18n_link: 3094 updated: 2021-03-02 #--- article key-values ---# collection: default_topiccluster t_keyword: Inventory Analytics tags: Inventory Analytics, Order Management Software type: supporting page_id: 3094 hreflang_id: 3094 parent_id: 3049 date_published: 2021-03-02 date_modified: 2021-03-02 #--- javascript schema ---# javascript_schema: - script: jquery_3_2_0_min - script: bootstrap_min - script: article_infinite_scroll - script: article_mix_infinitescroll - script: article_mix - script: article_mix_faq - script: article_mix_toc #--- section schema ---# section_schema: - section: nav-main_menu - section: article_body_v2 - section: footer - section: schedule_demo_cta #--- page key-values ---# meta_tags: t_meta_title: Inventory Analytics - 5 Metrics All Businesses Should Track t_meta_description: With inventory analytics, organizations can identify emerging customer trends to maintain healthy stock levels and avoid stockouts, backorders, and inflated costs. t_meta_abstract: With inventory analytics, organizations can identify emerging customer trends to maintain healthy stock levels and avoid stockouts, backorders, and inflated costs. i_meta_image: article_body: json-ld_article: v_date_published: 2021-03-02 v_date_modified: 2021-03-02 author: p_author_id: 113 t_author: Chloe Henderson p_author_url: chloe-henderson.html i_author: 113.jpg t_author_description: Chloe received a bachelor's degree in journalism and mass communication from Ashford University and is currently a digital content creator for Hubworks. In her free time, she enjoys acting, writing, and spending time with family. p_author_facebook: //www.facebook.com/HubWorksApp p_author_twitter: https://twitter.com/HubworksApp p_author_linkedin: p_author_instagram: feature_snippet: p_type: text t_title: t_description: content: heading: t_title: Inventory Analytics - 5 Metrics All Businesses Should Track t_description: With inventory analytics, organizations can identify emerging customer trends to maintain healthy stock levels and avoid stockouts, backorders, and inflated costs. image: i_image: inventory-analytics-5-metrics-all-businesses-should-track-1614377319-3065.png t_image_description: manage inventory v_image_attribution: Inventory Analytics v_image_license: pexels.com v_video: paragraphs: - t_headline: Introduction to Inventory Data Analytics t_text: Retail businesses have the added burden of monitoring and managing inventory as it travels through the supply chain. This calls for a sophisticated tracking system that records and reports critical stock data.

With inventory analytics, companies gain insight into their inventory activity that defines crucial strengths and weaknesses. This enables businesses to improve their inventory control, productivity, efficiency, and profitability. p_headline_type: h2 image: i_image: introduction-to-inventory-data-analytics-1614380582-8846.png t_description: v_attribution: v_license: pexels.com video: v_video: BQCOl-jyH7c v_video_language: default t_name: Ordering Made Simple with Zip Inventory t_description: #ShelftoSheetStreamline ordering with Zip Inventory.Save time by recording inventory counts on your mobile device and automatically place supplier orders. Visit //zipinventory.com today for your FREE trial! v_url: //youtu.be/BQCOl-jyH7c i_thumbnail: //i.ytimg.com/vi/BQCOl-jyH7c/default.jpg i_thumbnail_1x1: //i.ytimg.com/vi/BQCOl-jyH7c/default.jpg i_thumbnail_4x3: //i.ytimg.com/vi/BQCOl-jyH7c/mqdefault.jpg i_thumbnail_16x9: //i.ytimg.com/vi/BQCOl-jyH7c/sddefault.jpg v_upload_date: 9-10-2019 v_length_minutes: 0 v_length_seconds: 48 v_view_count: 79 callout_text: - t_headline: Why Businesses Need Inventory Analytics t_text: Inventory management can be a hassle if businesses do not have the right tools to monitor product activity. As supply chains expand, this task becomes even more challenging, as companies need to orchestrate manufacturing, distribution, and retail.

Inventory analytics provides critical insights into product management, so businesses can practice cost reduction and improve operations. However, studies show that only 34.7% of supply chains take advantage of inventory analytics simply because many companies remain unaware of its existence.
Without effective inventory analytics, companies can't efficiently track products as they work their way through the supply chain. This can result in discrepancies, unhealthy stock levels, and backorder.

On the other hand, inventory analytics utilizes modern software so companies can enhance their control. These solutions use machine learning to collect relevant real-time and historical data from existing systems to update inventory reports and metrics.

When coupled with demand forecasting software, predictive analytics can even project future sales and safety stock needs for inventory optimization. This ensures the businesses can satisfy fluctuating customer demand and maintain healthy inventory levels by anticipating emerging trends.

With analytics data, businesses can also improve business intelligence with sophisticated data science to improve product handling. p_headline_type: h2 image: i_image: why-businesses-need-inventory-analytics-1614380582-7821.png t_description: Inventory Analytics v_attribution: Inventory Analytics v_license: pexels.com callout_text: - t_headline: Inventory Analytics Metrics t_text: Distribution is a critical part of every inventory process and includes multiple systems that businesses must monitor to ensure they aren't incurring unnecessary costs. These systems can lag as a result of human error and poor management techniques.

Therefore, companies should track their performance and continuously improve their strategies. By tracking various key performance indicators (KPIs), distributors can clearly define their strengths and weaknesses. p_headline_type: h2 image: i_image: inventory-analytics-metrics-1614387686-6316.png t_description: Inventory Analytics v_attribution: Inventory Analytics v_license: pexels.com callout_text: - t_headline: Inventory Carrying Cost t_text: The inventory carrying cost measures how much money businesses must supplement to procure, store, and carry products. This means that carrying cost covers not only the retail price of the stock but also their


Unfortunately, many businesses are unaware of how much they invest in inventory, making it challenging to measure profitability. Therefore, distribution companies should designate a project manager to review the books and identify every expense related to inventory.

Once costs are defined, businesses typically calculate the total inventory carrying cost annually and convert the metric into a percentage. Usually, companies want their inventory carrying cost to stay below 25%. p_headline_type: h3 image: i_image: inventory-carrying-cost-1614388104-1826.png t_description: //pixabay.com/photos/coins-currency-investment-insurance-1523383/ v_attribution: //pixabay.com/photos/coins-currency-investment-insurance-1523383/ v_license: Creative Commons Zero callout_text: - t_headline: Inventory Shrinkage t_text: Inventory shrinkage is a metric centered around the difference between physical and recorded stock amounts. This type of inventory discrepancy can be the result of-


Companies should view inventory shrinkage as a dollar amount, sales percentage, and inventory percentage to determine precisely how the discrepancies are impacting profits. Of course, distributers want inventory shrinkage rates to be as low as possible, but businesses should really focus on steadily decreasing disparities over time.

By monitoring trends, companies can detect emerging threats and evaluate inventory risks. p_headline_type: h3 image: i_image: inventory-shrinkage-1614388104-7122.png t_description: inventory analytics v_attribution: inventory analytics v_license: pexels.com callout_text: - t_headline: Average Cost per Unit t_text: The average cost per unit is the total cost of production divided by the number of products manufactured. In other words, this quantity measures how much it costs to produce one unit, including the expense of-


If any one of these expenses increases, then the overall cost of a product increases as a result. However, costs may also increase as a result of expensive inventory entering the system or a clerical error. p_headline_type: h3 image: i_image: average-cost-per-unit-1614388104-8387.png t_description: inventory analytics v_attribution: inventory analytics v_license: pexels.com callout_text: - t_headline: Average Number of Units Picked t_text: The average number of units picked refers to how many times a product is gathered during the order fulfillment process per day, week, and accounting cycle. This number directly relates to a distributor's productivity and enables them to optimize their warehouse layout. For example, if a business finds a product is gaining popularity, they can rearrange their storage to move the inventory closer to the order fulfillment center.

This can significantly reduce travel time, improving productivity, operational efficiency, and resource allocation. Companies should also consider tracking the number of units picked per hour, as some products may fluctuate according to the time of day. Inventory is also subject to seasonality which impacts storage techniques and organization. p_headline_type: h3 image: i_image: average-number-of-units-picked-1614388105-2140.png t_description: inventory analytics v_attribution: inventory analytics v_license: pexels.com callout_text: - t_headline: Average Number of Units Put Away t_text: The average number of units put away is a metric that is especially important for the receiving team that handles incoming inventory. Much like the number of units picked, this KPI can be measured to fit any time limit, such as hourly, daily, weekly, and monthly. By monitoring the average number of units put away, distributors can assess customer demand and streamline their receiving and stocking processes.

Businesses should review and assess the value of inventory analytics to determine how it can impact their overall supply chain management. p_headline_type: h3 image: i_image: average-number-of-units-put-away-1614388105-2192.png t_description: inventory analytics v_attribution: inventory analytics v_license: pexels.com callout_text: event_body: json-ld_event: t_name: Employee Scheduling for Restaurant Managers t_description: Attendees will learn how create excellent schedules. The class teaches managers how to estimate the number of employees they need to staff their locations; how to accurately forecast their customer demand; how to quickly and accuaratly write and communicate schedules to employees; and how to evaluate the accuracy and optimization of their schedules to make adjustments. v_start_date: 2022-08-08 i_image: p_location_name: Altametrics Online Webinar Course p_address: webinar.altametrics.com?site=altametrics v_price: 10.00 t_offer_description: Priority Registration v_registration_url: webinar.altametrics.com?site=altametrics ---