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Inventory Days of Supply - Direct Materials (IDS-DIR)

Name

Inventory Days of Supply - Direct Materials (IDS-DIR)

Description

Total gross value of inventory at standard cost before reserves for excess and obsolescence. Only includes inventory on company books, future liabilities should not be included. Five point annual average of the sum of all gross inventories of direct and indirect materials, where direct material includes: - raw materials - WIP - plant FG, field FG, field samples and indirect material consists of: * tangible fixed assets * low value assets * consumable goods NOTE:
For indirect materials IDS-TOTAL only applies as long as they are in stock only, once they are in use they are not "inventory" anymore. They turn into either "consumption" (from a cost perspective this is likely to be assigned to SGA) or into "tangible fixed assets" (from a cost perspective this is likely to cause the need for depreciation with the enterprise asset management function typically within financials dept.) This definition is in close alignment with SCOR 7.0 (see URL of the Supply-Chain Council www.supply-chain.org).

Interpretation

The Inventory-Days-of-Supply allows to estimate for how long a stock level of a certain material will be sufficient to match upcoming requirements - basic assumption is a steady demand function.

Calculation Formula

Inventory Days of Supply-Total = (Inventory Days of Supply - Raw Material) + (Inventory Days of Supply - Work in Process) + (Inventory Days of Supply - Finished Goods)

where the individual terms represent:
IDS-raw equals the valued sum of all goods assigned to "Raw Material".
IDS-wip equals the valued sum of all goods assigned to "Work-in-Process".
IDS-fgd equals the valued sum of all goods assigned to "Finished Goods".

Unit of Measure

days

Direction

Minimize

Industry relevance

ALL industries that incorporate physical goods.

*Country *

GLOBAL



[# ftnref1|BPX:1] Total gross value of inventory at standard cost before reserves for excess and obsolescence.
Only includes inventory on company books, future liabilities should not be included. Five point annual average of the sum of all gross inventories (raw materials and WIP, plant FG, field FG, field samples, other) ÷ (COGS ÷ 365).

  1. KPI for Inventory Days of Supply - Raw Material; Work-in-Process (WIP); Finished Goods (Unit = days) is missing;

    NEW aggregated KPIs for Inventory Total; Raw Material; Work-in-Process (WIP); Finished Goods (Unit = pieces) is missing.

  2. Guest

    Hi Christine, 

    we have added the three Inventory Days of Supply KPIs, as requested:

    https://wiki.sdn.sap.com/wiki/display/BPX/Process

    Currently we do not have KPI definitions for the inventory total. You are free to create them yourself in the Wiki (under process KPIs).