Impact of COVID-19 on KPIs Development Focused on Inventory Turnover Ratio in Automotive Sector

Abstract: Key Performance Indicators (KPIs) are the vital navigation instruments used by managers to understand whether their business is on a successful voyage or whether it is veering off the prosperous path. The right set of indicators will show the company performance and point out the areas which need attention. The impact of COVID-19 on today’s globally integrated automotive sector is significant. The management has focused on main questions like how to accelerate cost-out measures and optimize the working capital across the entity. One of the items that have started to be in the center of attention nowadays is a company’s inventory and its level and turnover time. Therefore concerning about this, the inventory management should be sensitive in terms of continuous production and cash flow. Important question for management is how to identify, prioritize and accelerate cost-out measures across the entity. Finding the way how to optimize of volume of inventory, working capital and identify the proper measures to deliver rapid, tangible cash-flow benefits should be consulted in each company on daily basis.

Key words: Key Performance Indicators (KPIs), inventory, inventory turnover ratio, value added indicator, cash conversion cycle, working capital

JEL codes: M21, I