20 April 2011                                               www.strategosinc.com

Benchmarking Inventory

Our last newsletter discussed the question of how much inventory is enough? It addressed benchmarking using industry turnover averages. Such benchmarking analysis is straightforward for warehouse operations such as distributors.

Manufacturing is more complex. Manufacturers should consider not only the total amount of inventory but how it is distributed between Raw Materials, Work-In-Process and finished Goods. There is also wider variation in activities and accounting practices than is typically found in pure warehousing. Moreover, the issues raised by high inventory in manufacturing are more complex.

Our new page on Manufacturing Inventory Turnover has averages for major industry groups. It discusses how to make such comparisons and what conclusions might be drawn.

In addition you may purchase a spreadsheet with detailed industry averages for more than 750 industry groups and sub-groups.

Best Regards,

Quarterman Lee