36.11 Inventory and Supply Chain
Planners ask days of cover and how many days the SKU was stocked out. A high on-hand number feels safe and is often cash stuck in the godown. Module 35.6 is the dashboard brief.
| KPI | What the number means | Who uses it | Action it drives |
|---|---|---|---|
| Days of cover | On hand divided by average daily sales. Here, daily sales are the 30-day quantity divided by 30. | Planner | Cover under 15 days: raise a PO. Cover over 90 days: stop the next PO. |
| Stockout rate | Stockout days divided by days in the window (30). | Planner, store lead | A stockout is lost sales. On-hand today does not show last week's empty shelf. |
| On hand | Units in the godown today. | Only with cover | A large on-hand of a slow SKU is not a healthy warehouse. |
Fictional sample rows. A snapshot, plus the last 30 days of sales. Do not add these on-hand numbers across seven dates (Module 35.6).
| SKU | City | On hand | Sold in 30 days | Stockout days |
|---|---|---|---|---|
| Atta | Pune | 300 | 300 | 0 |
| Oil | Pune | 600 | 150 | 0 |
| Rice | Nashik | 40 | 120 | 6 |
| Dal | Nashik | 90 | 90 | 0 |
| Sugar | Kolhapur | 20 | 60 | 10 |
| Tea | Nagpur | 200 | 50 | 0 |
Worked from those rows.
- On hand 1,250. Sold 770. Stockout days 16 across 6 SKUs × 30 days = 180 SKU-days.
- Days of cover for the file is on hand divided by daily sales. Daily sales are 770 ÷ 30. Cover is 1,250 ÷ (770 ÷ 30) = 48.7 days.
- Stockout rate is 16 ÷ 180 = 8.9%.
Rice in Nashik: daily sales 120 ÷ 30 = 4, cover 40 ÷ 4 = 10.0 days, stockout 6 ÷ 30 = 20.0%. Oil in Pune: daily sales 150 ÷ 30 = 5, cover 600 ÷ 5 = 120.0 days, stockout 0.
| Good KPI | Vanity metric | |
|---|---|---|
| From the same rows | Rice cover 10 days, oil cover 120 days | Oil on hand 600, the biggest pile |
| Why | Rice will run out. Oil will sit for four months. | A "stock health" card that sorts by on-hand puts oil first and rice last. That is the wrong purchase order. |
What the manager does. The Nashik planner raises a rice order this week and does not touch dal (cover 90 ÷ (90 ÷ 30) = 30 days). The Pune planner cancels or delays the next oil purchase. Atta in Pune is 300 ÷ (300 ÷ 30) = 30 days, which is the planned cover in this file. Leave it. Kolhapur sugar is also 10 days of cover and was stocked out 10 of 30 days. Same action as Nashik rice.
Ravindra Bagale's Tip
A common mistake is to SUM on hand across seven snapshot dates. Stock becomes seven times too big. Keep the last date, then work out the cover. Do not add the snapshot and the ledger together. Don't forget this.
Ravindra Bagale's Tip – मराठी
एक common चूक म्हणजे सात snapshot dates वर on hand चा SUM करणं. Stock सातपट होतो. शेवटची date ठेवा, मग cover काढा. Snapshot आणि ledger एकत्र बेरीज करू नका. अजिबात विसरू नका.
Ravindra Bagale's Tip – हिंदी
एक common गलती है सात snapshot dates पर on hand का SUM करना. Stock सात गुना हो जाता है. आख़िरी date रखो, फिर cover निकालो. Snapshot और ledger को एक साथ मत जोड़ो. बिल्कुल मत भूलो.