Certified Production & Operations Manager Exam Practice 2026 – Complete Study Guide

The metric that is most commonly used to measure supply chain performance is inventory turnover. This metric indicates how efficiently a company manages its inventory by showing how many times inventory is sold and replaced over a specific period. A high inventory turnover rate suggests that a company is effectively turning its products into sales, which is a critical aspect of supply chain efficiency. It reflects the balance between inventory levels and sales, indicating whether a business is overstocking or understocking, both of which can affect overall performance.

While profit margin, employee satisfaction, and market share are important metrics in their respective contexts, they do not specifically target the operational efficiency and effectiveness of supply chains as directly as inventory turnover does. Profit margin focuses on financial performance rather than operational metrics, employee satisfaction relates more to workplace dynamics than supply chain metrics, and market share assesses competitive positioning rather than inventory management. Therefore, inventory turnover serves as a more direct indicator of supply chain health and performance.