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‘Inventory days’ can be misleading as an indicator of ‘product freshness’.
The twin objectives of Supply Chain are ‘product availability’ and ‘product freshness’, both of which should be maximized. While availability is tracked by most companies, freshness is seldom measured.
Many companies use ‘inventory days’ as a surrogate measure of product freshness. We should be careful as it may not always hold true.
Let me explain with an extreme example. If we take a large production batch of 30 days demand, we would have inventory of 30 days and stock ageing of zero. The next day will show inventory of 29 days and ageing of 1 day. After 29 days, inventory will come down to 1 day with ageing of 29 days.
We should evolve a measure of product ageing separately, instead of taking inventory days as a surrogate.