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Inbound Percent of Supplier The number of orders Number of supplier Inventory Average day sales The amount of time Average % of month
orders received damage that are processed orders that are Management outstanding required to convert AR/ (total annual sales
free damage free as a processed damage receivables to cash. To /365)
percentage of total free / the total supplier even out seasonality,
orders orders processed in the this includes a rolling
measurement period. monthly average of AR
Inbound On Time Receipts - Percent of orders Number of supplier (This is also known as
“Average Collection
Supplier received from a orders received on time period”).
supplier on the date / total number of orders Outbound On Time Shipments The percentage of Number of order
requested. received
orders shipped at the shipped on time /
planned time, (shipped Total number of orders
Inventory Inventory shrinkage The amount of Sum (value of means off the dock shipped.
Management as a percent of Total breakage, pilferage breakage, pilferage, and in transit to its
Inventory or deterioration of all deterioration to all final destination). Note
inventories relative to inventory) / total of all that the time to ship
total inventory. Usually inventory may be defined by the
stated in terms of customer, or it may
value, not units. be determined by the
shipper in order to
accommodate an On
Time Delivery.
Outbound Total Order Cycle Time The average end to Excluding non-working
Inventory Inventory days of Measure of quantity Current (or period end time between days: sum of (Time
Management supply of inventory on hand, ending) total inventory order placement by the Order received by
in relation to number value / (Total annual customer and order customer - time order
of days for which COGS / 365) receipt by the customer. placed) / Total number
usage which will be of orders shipped.
covered. Total gross Outbound Internal Order Cycle The average internal
value of inventory at Time time between when
standard cost before the order was received
reserves for excess and from the customer and
obsolescence. Only Order Shipment by the
includes inventory on supplier.
company books, future Note that order Excluding non-working
liabilities should not be shipment is defined days : Sum of (Time
included. as off the dock, Order Shipment - time
onto the shipping order received from the
conveyance and customer) / number of
Inventory Average days payable Measure of the length Average daily payables ready for transit. orders shipped.
Management of time required to pay / (Total Annual COGS Outbound Perfect Order Index A compilation score
suppliers; key element / 365)
in cash-to-cash cycle which measures the
time. result each of the 4
major components of a
Perfect Order :