Enterprise Inventory Management Best Practices

Overview

Inventory quality is not a single dimension. An inventory can be comprehensive in coverage but inaccurate in content. It can be accurate for the items it contains but missing many items it should include. It can be accurate and comprehensive at a point in time but rapidly become stale as items change. Each of these failure modes has different causes, different consequences, and different remediation strategies. Measuring inventory quality as a single aggregate score masks these distinctions and produces improvement efforts that address the wrong problems.

Best Practice

Measure and report inventory coverage, accuracy, and currency as separate, distinct quality dimensions rather than combining them into a single score. Assign a separate quality target for each dimension based on the criticality of the inventory and its use cases. Track each dimension independently over time so that trends in each can be identified and addressed separately. When an inventory’s aggregate quality is reported, decompose it into its component dimensions so that the specific nature of any quality deficit is visible.

Benefit(s)

Separate measurement of coverage, accuracy, and currency enables targeted, efficient improvement efforts. Coverage gaps are addressed by discovery and population initiatives. Accuracy gaps are addressed by validation and correction processes. Currency gaps are addressed by review cadence and automated monitoring. Resources are directed to the right types of improvement effort for the specific quality deficit being addressed. The Enterprise Model’s quality is improved more efficiently because the diagnosis of quality problems is specific rather than aggregate.