Inventory Ageing

Definition

Age buckets, exposure analysis and action ownership. This reference is designed for practical industrial stores, MRO, production and materials-management environments.

Objective

Expose capital and obsolescence risk by time since receipt or last movement.

Scope

Apply the method at item, category, location or plant level as appropriate. The control should connect planning, purchasing, stores transactions, physical verification and management review.

Required Inputs

Receipt date
last issue date
quantity
value
item class.

Methodology

Define the business requirement, scope and review period.
Validate item master, consumption, stock and open transaction data.
Calculate or classify using the defined method.
Compare the result with criticality, supplier constraints and future demand.
Assign an action owner, due date and review frequency.
Monitor KPI movement and revise parameters when conditions change.

Formula / Control Logic

Age = Reporting Date − defined age start date. Use consistent buckets such as 0–90, 91–180, 181–365, >365 days as policy requires.

Worked Industrial Example

₹8 lakh in >365-day stock deserves an action review even if the item is still technically usable.

Decision Rules

Use separate ageing logic for consumables, spares and shelf-life items.
Link old stock to owner and action.
Track ageing trend month-on-month.

Industrial Controls

Authorized master-data and parameter changes
ERP transaction discipline and document traceability
Physical verification and reconciliation
Exception reporting with named ownership
Periodic management review of ageing, service and capital exposure

KPIs

Service

Availability, fill rate and stock-out performance.

Accuracy

Book-to-physical reliability and transaction quality.

Capital

Turnover, coverage, ageing, excess and dead stock.

Common Errors

Ageing from wrong date.
Mixing receipts from multiple lots without traceability.
No action after reporting.

Excel / MIS Application

Useful fields: Item Code, Description, UOM, Opening Qty, Receipt Qty, Issue Qty, Closing Qty, Unit Rate, Annual Consumption, Current Stock, Open PO, Lead Time, Safety Stock, ROP, Min, Max, ROQ, ABC, VED, FSN, Ageing, Action.

Management Review Questions

Which items require action now, and why?
Are open orders aligned with actual requirement?
Which exceptions are recurring and what is the root cause?
Which parameter should be changed, and what evidence supports the change?

Related Inventory References

Professional practice: A calculation is a control aid, not a substitute for engineering judgement, approved policy, physical verification or business-risk assessment.