Inventory Metrics that Matter for EMS

The Importance of Metrics in EMS

Metrics are the cornerstone of continuous improvement for EMS (Electronics Manufacturing Services) companies. Quoting Peter Drucker, "If you can't measure it, you can't improve it." This holds true when developing sustainable business strategies, where balancing different metrics and understanding the right levers to pull is crucial for success.

Mastering Inventory Metrics

Accurate inventory management is essential but challenging. It starts with understanding three levels of metrics—aggregated, trends, and details—to track reliability and make necessary adjustments. Inventory accuracy impacts the balance sheet and profitability, making detailed tracking vital for smooth operations.

Improving Inventory Value and Movement

Distinguishing between raw materials, finished goods, and inventory is key to understanding inventory value and its effect on liquidity and working capital. Segmented tracking of inventory movement, by customer or part class, helps predict production flexibility, while addressing unused and aging inventory prevents losses.

Boosting Profitability Through Smart Inventory Management

Tracking gross margin, carrying costs, and price variance helps assess profitability. Strategic inventory management, such as organizing warehouses and improving procurement, can improve cash flow and reduce risks, helping companies avoid unnecessary costs and boost profitability.

Conclusion:

To successfully improve EMS operations, a combination of strategy, people, process, and technology is required. Effective metrics tracking serves as the backbone, but integrating all these elements leads to long-term growth. For further insights, a consultation by CalcuQuote could offer deeper guidance on optimizing metrics for your business.