Key performance indicators are quantifiable metrics used in supply chain and inventory optimization that evaluate the effectiveness, efficiency, and performance of various processes. Common KPIs include stockout frequency, inventory carrying cost, order fulfillment cycle time, inventory turnover rate, and forecast accuracy. By keeping an eye on KPIs, organizations can identify bottlenecks, optimize inventory levels, improve customer service, and make data-driven decisions. When KPIs are well-defined, supply chain goals align with overall business objectives.
