Executive Briefings

What's the Value of Increasing Inventory Accuracy by 1 Percent?

Examining inventory accuracy with other metrics in APQC's Open Standards logistics research, APQC found that an increase in inventory accuracy from 98 percent to 99 percent is associated with:

• a 7.7 percent increase in supplier orders delivered on time,
• faster dock-to-stock cycle times (1.56 hours faster), and 
• a 2.25 percent increase in the number of sales orders delivered on time.

According to the same data, inventory accuracy also is correlated with:

• higher percentages of supplier orders delivered on time, 
• shorter dock-to-stock cycle times for supplier deliveries, 
• higher percentages of sales orders delivered on time,
• lower total cost to operate outbound transportation per sales order, and
• lower freight costs to operate outbound transportation as a percentage of total logistics cost.

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Examining inventory accuracy with other metrics in APQC's Open Standards logistics research, APQC found that an increase in inventory accuracy from 98 percent to 99 percent is associated with:

• a 7.7 percent increase in supplier orders delivered on time,
• faster dock-to-stock cycle times (1.56 hours faster), and 
• a 2.25 percent increase in the number of sales orders delivered on time.

According to the same data, inventory accuracy also is correlated with:

• higher percentages of supplier orders delivered on time, 
• shorter dock-to-stock cycle times for supplier deliveries, 
• higher percentages of sales orders delivered on time,
• lower total cost to operate outbound transportation per sales order, and
• lower freight costs to operate outbound transportation as a percentage of total logistics cost.

Read Full Article