The stockroom makes a service agreement with maintenance to stock certain parts in quantities adequate to supply maintenance needs. A stock out occurs when the stockroom runs out of a stocked part when it is needed. The measurement of this service agreement is stocking level.

Different parts should have different stocking levels. A common part available locally is less critical to hold than a long lead time OEM replacement part on a critical asset.

Key performance indicators (KPIs) flow directly from the AIM of the organization. They are a subset of performance indicators (Pi), which may or may not be “key” indicators. KPIs are the few measures that keep you in action with your continuous improvement (Ci) effort.

How do you measure this inventory when most of the well-established KPIs were developed to manage the inventory of retail stores, not storerooms? If you segment the inventory appropriately, you can use these traditional metrics.

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