Days on Hand: Raw Materials
This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Days on Hand: Raw Materials. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.
What is Days on Hand: Raw Materials?
The total value of raw materials in the company's inventory divided by the average value of raw materials used in a single day.
Why should Days on Hand: Raw Materials be measured?
Days on Hand: Raw Materials measures the number of manufacturing days before all raw materials on hand are used. High values for this KPI may suggest that the company is not accurately forecasting the demand for its products or that the company does not have an effective inventory carrying strategy. A low value for this KPI is generally preferred due to the high inventory carrying costs related to storing raw materials in warehouses. However, if raw material stock is too low, companies risk losing out on sales due to stock-outs, so safe levels of raw materials inventory must be maintained.
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