Consultants in Lean Manufacturing Á Manufacturing Strategy

lean article mnu lead-in

Warehouse & Wholesale Inventory Turnover Data

How Much Inventory should You Have? 

Benchmarking & Monitoring

For most wholesalers and distributors, inventory and the space to store it is the largest single cost of doing business. From purely a cost viewpoint, less inventory means less cost. At the same time, insufficient inventory can lead to stockouts, lost sales and unhappy customers. Balancing these two factors is critical to profitability and growth but achieving that balance is not obvious or easy.

Inventory Turnover Equation

One metric for evaluating the amount of your inventory is Inventory Turnover. Turnover measures the efficiency of inventory usage and compensates for differences in sales volume. This metric is simple, intuitive and easy to calculate. Both sales and inventory value are measured in terms of Cost of Goods:

Turnover can monitor trends or changes from previous periods. It is also useful for benchmarking against similar firms. When benchmarking with industry averages there are several cautionary notes:

1) There are wide variations in turnover even within an industry or industry sub-group. The best firms may have turnovers that are 200%-400% of the industry average. Targeting the industry average turnover is setting up mediocrity as a goal.

2) There MAY be special circumstances that dictate an average or below average turnover. However, such circumstances can often be overcome. When low turnover occurs, it is important to find and rectify the source of high inventory.

Summary data for wholesale industry turnover averages are shown at right. We offer a much more detailed spreadsheet with over 260 categories and sub-categories for only $6.00. Click Here to purchase.


Purchase Detailed Data

More than 260 categories and sub-categories in NAIC code 42. Handy Excel format. Immediate download. $8.00

Industry Average Inventory Turns
  Merchant Wholesalers  
NAIC Description Sales (COGS) Year-end Inventory (COG) Annual Turns
  Merchant wholesalers (All) 1,825,205,737 230,839,579 7.9
421 Wholesale trade, durable goods  909,068,358 146,224,425 6.2
4211 Motor vehicle & vehicle parts & supply 135,856,383 17,086,156 8.0
4212 Furniture & home furnishings whsle 26,309,746 5,138,286 5.1
4213 Lumber & other construction matls whsle  49,362,765 5,555,412 8.9
4214 Professional & commercial equipt-supply 177,110,037 20,505,089 8.6
4215 Metal & mineral (except petroleum) whsle  73,235,527 11,965,871 6.1
4216 Electrical goods whsle  133,707,986 18,711,743 7.1
4217 Hardware/plumbing/heating equipt & supply 41,156,615 9,185,806 4.5
4218 Mach, equipt, & supply whsle  157,129,086 41,093,543 3.8
4219 Miscellaneous durable goods whsle 115,200,213 16,982,519 6.8
422 Wholesale trade, nondurable goods  916,137,379 84,615,154 10.8
4221 Paper & paper product whsle  51,792,304 5,117,298 10.1
4222 Drugs, & druggists sundries whsle 88,808,181 12,946,620 6.9
4223 Apparel, piece goods, & notions whsle 58,866,579 12,038,566 4.9
4224 Grocery & related products whsle  277,515,940 17,736,637 15.6
4225 Farm-product raw matl whsle  118,732,968 9,664,441 12.3
4226 Chemical & allied products whsle  41,394,863 4,470,487 9.3
4227 Petroleum & petroleum products whsle  122,456,533 4,446,297 27.5
4228 Beer & ale whsle 43,858,869 4,996,576 8.8
4229 Miscellaneous nondurable goods whsle  112,711,142 13,198,232 8.5

Effective Warehouse Management

 Learning Team-Inventory Inventory in vsm

Simulation - Participation - Exercises - Implementation

Strategos Can Help To...

  • Design or improve your warehouse layout and operations for maximum efficiency.

  • Reduce inventory required and space required for its storage.

  • Improve customer response.

  • Reduce stockouts.

The Process Starts With...

1. A preliminary discussion that scopes the size and complexity of the problem.

2. A project discussion will follow in several days to, jointly, outline the scope of a project that meets your needs and estimate preliminary costs. We will then send a proposal.

3. If you accept the proposal, we begin data acquisition and, together, execute the project.


■ ■ ■ ■ ■ ■ ■

Contact Webmaster


SEP 2007     ©_Permissions

Strategos-International:  North America - Europe - Australia

Strategos Footer

Lean Briefing Logo

The Free Newsletter

of Lean

Manufacturing Strategy

Lean Briefing Archives

The Strategos Guide To Value Stream and Process Mapping goes far beyond symbols and arrows. In over 163 pages it tells the reader not only how to do it but what to do with it. More info...

Strategos Guide to Value Stream & Process Mapping