I discussed some of the possible pitfalls when using inventory turnover as a measurement for effective inventory management. In this post, I’ll describe a simple technique for measuring inventory effectiveness.
Look beyond the Turnover Ratio! Here’s a Simple Way to Create an Effective Inventory Management Process
Use this simple tool for identifying areas of potential improvement in the business to create an effective inventory management process. This type of measurement allows for a more widespread understanding of the nature of inventory and fosters action to prevent a build-up of non-value-adding "drag".