Enterprise Inventory Management Best Practices

Overview

Enterprise inventories that are not measured cannot be managed. Without defined metrics, inventory quality is assessed through impression and anecdote rather than data. Improvement efforts are undirected because there is no objective baseline from which to measure progress. Investment decisions cannot be justified because the current state and the impact of improvements are not quantified. Leaders who do not have visibility into inventory health cannot make informed decisions about inventory investment.

Best Practice

Define a set of metrics and KPIs for every enterprise inventory that provides an objective, comparable view of inventory health. At minimum, track the four dimensions of inventory quality: coverage — the percentage of known items of the inventory type that have an entry; accuracy — the percentage of entries that correctly represent the current state of the items they describe; currency — the percentage of entries that have been validated within the required review period; and completeness — the percentage of mandatory attributes that have values across all entries.

Roll up individual inventory quality scores into an aggregate Enterprise Model health score that provides leadership with a single view of enterprise inventory maturity.

Benefit(s)

Defined inventory metrics transform inventory management from an impression-based activity into an evidence-based discipline. Quality trends are visible and comparable across inventories. Improvement efforts can be targeted to the inventories and quality dimensions with the greatest gaps. Investment decisions are grounded in quality data rather than assumptions. The Enterprise Model health score gives leadership a meaningful, actionable view of the organization’s self-knowledge maturity.