Lean Strategies International
Menu

Glossary

Would you like to add a term to the community? Click Here!

Days of Supply

3/10/2023

0 Comments

 
Picture
Click on the Picture to Subscribe on YouTube!
Managing inventory would be impossible without a means to track how much inventory is on hand and if it is an appropriate amount of inventory.  With that being said, the days of supply metric is a useful metric that can show an organization how many days their existing inventory will last before it reaches zero or drops into their safety stocks.
Click Here to Subscribe to Our YouTube Channel.
  The days of supply are often evaluated by defined periods.  For example, 30 days, 60 days, 90 days or even periodically.  You will need to decide what period of evaluation will work best for you.  From a planning perspective this can be beneficial on many different levels.  
  • First, it helps a planner gauge when they will run out of inventory as well as plan for replenishment of those items if necessary. 
  • From a procurement perspective the days of supply metric can help determine how many items to order, when to order and how frequently the purchaser should order.
  • One of the many benefits of the days of supply metric outside of knowing when you will run out of inventory is that it decreases ordering costs because planner and procurement officers are able to gauge better what they need to order. 
  • This will also have a positive effect on receiving materials and help you avoid lost sales.
Days of Supply
Click on the Picture to Subscribe on YouTube!
  ​Now that we know what days of supply is, let’s look at how this metric is calculated.  Days of Supply is calculated by dividing your inventory on hand by the average daily usage.  For example, if your organization has 1,000 units on hand and you are using on average 14 per day you would have 71 days of supply left in inventory.  
Challenge:
  • Let’s say we have 1,740 units of inventory on hand and our company uses about 24 units a day.  What would our days of supply be?  Share your thoughts in the comments section below and receive a coupon to one of Lean Strategies International LLC's courses.
Click Here to Visit our Training Page!
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.


    Glossary


    Subscribe below and receive lean, six sigma, operations, supply chain, logistics, distribution and business terms in your mailbox.

    CLICK HERE TO SUBSCRIBE

    Categories

    All
    #
    01. Add A Term
    3D
    3PL
    3P's
    5 Principles
    5S
    5 Why's
    6σ
    8 Wastes
    A
    B
    C
    D
    E
    F
    G
    H
    I
    J
    K
    L
    M
    N
    O
    P
    Q
    R
    S
    T
    U
    V
    VSM Shapes
    W
    X
    Y
    Z

    Archives

    March 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    April 2020
    March 2020
    November 2019
    October 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    March 2018
    February 2018
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    November 2015

Lean Strategies International LLC.
Follow Us on YouTube or Our Other Channels Below.
             ©2015-2021 Lean Strategies International LLC.  
  • Home Page
  • Services
    • Training >
      • Waste Training
      • Introduction to Lean
      • Lean Champions >
        • Lean Six Sigma White Belt
        • Lean Six Sigma Yellow Belt
      • Lean Tools You Can Use Series! >
        • The 5S System
        • The ©Gemba Methodology
        • The FISH Methodology
        • The CURE Methodology
        • Quick Changeover with REDUCE
        • Mistake Proofing and the Poka Yoke System
        • The Just in Time System
  • Lean Resources
    • Listen to The Gemba
    • Glossary
    • Lean and Six Sigma Quotes
    • Recommended Reading
    • Events
    • Masters of Lean and Six Sigma
    • Career /Jobs
  • Store
    • Workspace
  • Home Page
  • Services
    • Training >
      • Waste Training
      • Introduction to Lean
      • Lean Champions >
        • Lean Six Sigma White Belt
        • Lean Six Sigma Yellow Belt
      • Lean Tools You Can Use Series! >
        • The 5S System
        • The ©Gemba Methodology
        • The FISH Methodology
        • The CURE Methodology
        • Quick Changeover with REDUCE
        • Mistake Proofing and the Poka Yoke System
        • The Just in Time System
  • Lean Resources
    • Listen to The Gemba
    • Glossary
    • Lean and Six Sigma Quotes
    • Recommended Reading
    • Events
    • Masters of Lean and Six Sigma
    • Career /Jobs
  • Store
    • Workspace