The dashboard: the metrics that matter most

The count is over and the spreadsheet holds hundreds of rows. A manager does not read them one by one; they need the answer to a single question: is the warehouse getting better or worse? A dashboard should answer exactly that, and it does not take dozens of charts to do so. One sheet in Excel or one ready-made screen in the counting software is enough, as long as it shows three figures: the accuracy rate, the value of shortages and the unresolved differences.

Why exactly three metrics

Put many numbers on a dashboard and people look at none of them. These three answer three plain questions: how closely do the books match reality, what do the differences cost in money, and how much work is still open. Breakdowns by zone, category or counter exist so you can look inside these three figures, not to crowd the main screen.

Accuracy rate

The formula is simple: divide the number of positions with no difference by the number of positions counted and multiply by a hundred. Say 420 positions were counted and 21 showed a difference. (420 − 21) / 420 = 95 percent.

There are two delicate points. First, write down in advance what counts as a "difference". For goods counted by the piece, any deviation is a difference; for kilograms or metres, a deviation of up to one percent, say, is often accepted as normal. If the rule changes, the percentage changes with it and you can no longer compare with earlier months. Second, if accuracy is calculated by number of positions, a mistake on one expensive phone and a mistake on ten cheap buttons look equally heavy. So put accuracy by value beside it.

One more warning: do not compare the rate from a full count with the rate from a cycle count. A cycle count usually picks risky and fast-moving goods, so its figure naturally comes out lower.

Shortage value: in money

A manager will look at a figure in so'm, not at pieces. Multiply the shortage by the cost price, not the selling price: what vanished from the warehouse is purchased goods, not a lost margin. Show shortages and surpluses in separate columns and then the net result, or they will cancel each other out.

Besides the absolute sum, look at the share. If the goods in the warehouse cost 640 million so'm and the shortage is 3.2 million, the loss is 0.5 percent. That figure lets you compare a large warehouse with a small one, or two branches. A small table helps too: the five biggest positions by value. Most of the loss usually gathers in those five, so that is where attention should go.

Unresolved differences: age matters

Knowing how many differences are open is not enough; you need their "age" as well. Example: 18 differences are unresolved, 11 of them younger than three days and 7 older than a week. The second group is the dangerous one: an old difference slowly becomes "normal", its cause is forgotten, and in the end it is simply written off. Next to every open difference there should be an owner and a deadline. By the time the reporting period closes, the number of open differences should be zero.

The weekly review and mistakes

Review the dashboard once a week, on Monday for example, for 15 minutes. The routine: compare the three figures with the previous four weeks, find the worst zone, make one decision. Do not draw conclusions from a single day's result; a trend says more.

A decision need not be big. Putting a second counter on the worst zone, replacing torn labels, retraining one employee or counting one product group twice a week all qualify. What matters is checking next week that the zone's figure has moved: then the dashboard is a working tool, not decoration.

Common mistakes:

• To "hit" a target, counters begin to hide differences. Accuracy looks close to 100 percent while the problem stays buried.
• The dashboard is built on unapproved data and the figures change after corrections.
• Everyone calculates the formula in their own way: one by units, another by rows.
• The metrics grow to twelve and nobody watches any of them.

Conclusion

A good dashboard shows few numbers, but each one points to a decision: accuracy describes the state, shortage value the loss, open differences the work that remains. If you lack the time to set up such control yourself, the ongoing control service from StockCheck prepares a monthly report and the trend in shortages.