Inventory Shrinkage

Benchmarking Report

Inventory Shrinkage

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 Inventory Shrinkage. 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 Inventory Shrinkage?

The total cost related to inventory shrinkage (broken, pilfered, spoiled, or stolen inventory) divided by the average dollar value of inventory on hand, as a percentage.

Why should Inventory Shrinkage be measured?

Inventory Shrinkage measures the portion of a company's inventory that is lost and does not generate any revenue. High Inventory Shrinkage may be a result of inventory theft, inventory damage, miscounting, supplier fraud, accounting errors, misplacement or expiration. Inventory Shrinkage is costly to the company not only in terms of lost inventory, but managers may need to spend money on heightened security to prevent future shrinkage. Inventory Shrinkage may also foster an environment of mistrust between management and employees, which can reduce productivity and efficiency.


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