Ah, inventory. The bane of a retailer’s existence. Whether you sell clothing, car parts or cat food, inventory is a necessary evil. But it’s much more than that; it’s an important business component that, when managed effectively, can help you maintain tight margins and trim overhead. When managed poorly—or not managed at all—it can be a money pit.
There are a few measurements in life you always keep an eye on. The level of gas in your car. The temperature outside. The amount of coffee left in the cabinet. Knowing these measurements helps you keep your life running smoothly; you’ll never run out of gas unexpectedly, get caught in a cold front without a coat or be forced to spend the morning as a caffeine-free zombie.
In the same way, your business also has a number of important metrics known as KPIs—key performance indicators—that gauge the health and financial position of the company.