Euroroute Logistics
Inventory Metrics Every Operations Manager Should Know
Maintaining optimal inventory health is critical for e-commerce success, particularly in Ireland’s dynamic market where efficient logistics and 3PL partnerships are essential. For operations managers, the solution starts with understanding inventory health. Regular inventory checks guided by the right metrics can drive better performance across the supply chain. When paired with the support of a strategic 3PL partner like Euroroute Logistics, these insights become actionable steps that improve profitability, reduce waste, and streamline fulfilment. In this blog we outline the essential inventory metrics every operations manager should know and how Euroroute helps businesses optimise each one.
1. Inventory Turnover Ratio
This metric tells you how often stock is sold and replenished over a set period. A high turnover rate generally means strong sales and good stock efficiency, while a low rate may indicate overstocking or slow-moving inventory. Euroroute systems provide real-time turnover data across all SKUs, giving you the visibility to make fast, informed restocking decisions that reduce waste and capital tied up in unsold stock.
Formula:
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
2. Days Sales of Inventory (DSI)
DSI tracks the average number of days it takes to sell inventory. A lower DSI indicates efficient movement of stock, which is essential for cash flow and avoiding overstock. Euroroute’s 70,000 sq. ft. facility is ideally located in Dublin, adjacent to the M50 network and within easy reach of Dublin Port and Dublin Airport. This prime location, combined with our extensive network of transport partners and strategically positioned fulfilment centres across Ireland and the EU, allows us to reduce delivery times, improve turnover speed, and keep your inventory lean, agile, and responsive to demand.
Formula:
DSI = (Average Inventory ÷ COGS) × 365
3. Dock-to-Stock Time
This measures how long it takes for goods to be shelf-ready after they arrive at your warehouse. Delays at this stage slow down the entire supply chain. Euroroute’s advanced batch tracking and warehouse automation ensure new inventory is available for sale faster, keeping your order cycle flowing smoothly.
4. Inventory Accuracy
Inventory accuracy compares recorded inventory levels to physical counts. Inaccurate records can lead to stockouts, mis-picks, and frustrated customers. Euroroute’s Warehouse Management System (WMS) provides real-time, SKU-level visibility and live inventory updates minimising errors and ensuring accuracy across your operation.
Formula:
Accuracy = (Counted Units ÷ Recorded Units) × 100
5. Shrinkage Rate
Shrinkage includes losses due to theft, damage, or administrative errors. High shrinkage directly impacts profitability. At Euroroute we have best in class secure facilities, trained personnel, and automated stock audits, we help clients minimise loss and protect valuable inventory.
Formula:
Shrinkage = ((Recorded Inventory – Actual Inventory) ÷ Recorded Inventory) × 100
6. Gross Margin Return on Investment (GMROI)
This measures how much profit your inventory is generating relative to its cost. A higher GMROI means more efficient use of capital. Euroroute supports smarter stock planning and demand forecasting to ensure high-performing products are always in stock maximising your return on investment.
Formula:
GMROI = Gross Margin ÷ Average Inventory Cost
7. Cost Per Unit
This metric reflects the true cost of storing, picking, and shipping each item. Reducing this improves your profit margin. Euroroute Helps customers lower cost per unit through bulk storage, optimised picking workflows, and technology-led fulfilment systems that reduce handling times.
8. Stockout Rate
A high stockout rate means missed sales and unhappy customers. This metric tracks how often products are unavailable when customers need them. Euroroute provides automated reorder alerts and real-time inventory monitoring to ensure you maintain healthy stock levels and avoid outages.
9. Order Lead Time
This is the total time it takes to process and deliver an order. Customers expect fast, reliable delivery especially in e-commerce. With a strategically located fulfilment hub in Dublin, Euroroute enables fast, efficient dispatch across Ireland and beyond. Combined with our mainland European network and trusted transport partners, we help reduce transit times and ensure quicker, more reliable deliveries to your customers across multiple markets.
10. Return Rate & On-Time Orders
High return rates often point to picking errors or product issues. Meanwhile, your on-time delivery rate reflects service reliability. The Euroroute team performs quality checks before dispatch and monitors carrier performance to ensure accuracy and timely deliveries.
Formulas:
Return Rate = (Returns ÷ Sales) × 100
On-Time Rate = (On-Time Shipments ÷ Total Orders) × 100
Why Inventory Health Matters
These inventory metrics represent useful decision-making tools that can affect your end of year profit levels. Healthy inventory means fewer delays, better margins, and happier customers. With over 20 years supporting Irish e-commerce and manufacturing businesses, Euroroute Logistics provides the tools, systems, and expertise needed to track and improve every critical inventory metric. Are you ready to assess your inventory performance? Contact Euroroute Logistics today to schedule a comprehensive inventory health check and explore how we can help you stay ahead.
Maintaining healthy inventory is key to profitability and customer satisfaction.
Regular inventory checks guided by the right metrics can drive better performance across the supply chain.