Inventory Management – Health Check

The Inventory Health Check will compare your business to industry best practices and grade your response. This will give you an idea of the potential areas in your business that are lagging behind the standard and could use some additional attention.

Upon completion, you will be provided qualitative results and an overall score that will allow our advisors to recommend potential solutions to your challenges through a free Innovation Workshop.

Let’s get started.

Business Processes - Part 1

1. What does your ideal inventory level look like? Is it:

2. Is there a regularly updated sales forecast created? Is there a plan in place to manage variations (both up and down) compared to the forecast?

3. Are there frequent (at least yearly) negotiations with your suppliers regarding contracts and / or price points?

4. Are there frequent SKU rationalizations performed to identify under-performing SKU's?

Business Processes - Part 2

5. How long does it take to perform inventory counts? How many resources are needed? How frequently do they occur?

6. Is there structure to your SKU nomenclature and SKU descriptions? In other words, do your SKU's follow a set alpha-numeric scheme that allows for future growth and variability?

7. Are there any ABC analysis performed regularly on your suppliers, customers, or SKU base?

8. Is there a calculated safety stock for each SKU? Do you find you often run out of key products?

9. Are there processes in place to control the purchasing habits of your replenishment professionals?

Management Systems - Part 1

10. Are the current inventory management practices:

  • Agile - can react to short-term demand fluctuations?
  • Adaptable - ability to adjust the supply chain to meet structural shifts in the market easily?
  • Aligned - has alignment on strategic vision, goals, and targets across all levels of the organization?

11. Is there a strategic procurement plan in place, such as a defined strategy surrounding inventory purchasing including pricing, supplier management, and procurement personnel organizational structure?

12. Are there any in-depth supply chain data analytic capabilities around profit reporting, price analysis, supplier analysis, and customer analysis?

Management Systems - Part 2

13. Are there set ROP's and ROQ's across all your SKU's? Are these driven by mathematical minimum and maximum calculations, or more robust replenishment formulas?

14. Are there strategic targets for your turn-to-earn and GMROI ratios?

15. Do you know how much inventory is obsolete, in surplus, or under stocked?

16. Do you track performance of SKU's where demand cannot be met and thus sales are limited? Are there plans in place to increase stock to improve sales?


17. Would your company benefit from employee training? If so, what kind of impact would this have on your bottom line?

18. What is your biggest inhibitor to growth and profitability?


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Inventory Management – Health Check

The Inventory Management Health Check assessment was developed by examining the most common issues we discuss with clients in the industry. With this tool, you can start building a roadmap to success.

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To learn more about Process Improvement, contact Yohaan Thommy

Yohaan Thommy , LSSBB, PMP, CMC

T: 905.220.3211