Inventory Days of Cover vs Lead Time Worksheet
Days of cover tells you how long stock will last at current usage. Set against lead time, it shows which parts will run out before a new order can arrive and which carry far more than they need.
| Part number | On hand (units) | On order (units) | Average daily usage (units/day) | Lead time (days) | Unit cost | Days of cover (on hand) | Days of cover (incl. on order) | Cover minus lead time (days) | On-hand value | |
|---|---|---|---|---|---|---|---|---|---|---|
61.8182 | 98.1818 | 70.1818 | $10,540 | |||||||
10.7143 | 10.7143 | -24.2857 | $3,360 | |||||||
10 | 35 | 21 | $756 | |||||||
34.6154 | 57.6923 | 1.6923 | $36,900 | |||||||
103.1579 | 103.1579 | 93.1579 | $6,370 |
Days of cover assumes steady usage. A negative gap means on-hand plus open orders will not last through the replenishment lead time at the current rate, check open order due dates before acting.
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How to use the worksheet
Pull on-hand, open purchase or work order quantity, average daily usage and lead time for the parts you manage. Usage should come from recent issues, for example the last 90 days divided by working days, adjusted for known events. Paste or type the data, delete the sample rows and read the two computed cover columns and the gap. Sort the exported Excel by the gap column to build your daily shortage list.
The calculation
Days of cover = quantity divided by average daily usage. Two versions are shown: on hand only, which is the real buffer today, and on hand plus on order, which assumes open orders arrive on time. The gap is total cover minus replenishment lead time. A negative gap means that even if everything arrives, a reorder placed today would arrive after you run out. A very large positive gap points to excess you may be carrying.
How to read it
Treat items with a negative gap as urgent: expedite, split orders or find an alternate source. Items with on-hand cover shorter than lead time but healthy total cover depend on open orders, so check due dates and supplier confirmations. Items whose cover is many times the lead time are candidates for lower order quantities, cancelled open orders or the slow-moving review. Use the on-hand value column to prioritise by money tied up.
Common mistakes
Using last year's average usage for a part with a changing trend gives a false picture, use a recent window. Counting on-order quantity that is already late inflates cover. Forgetting allocated or reserved stock overstates availability, so use available quantity if your ERP tracks it. And remember lumpy parts do not consume smoothly, for those add a safety buffer or use requirements from MRP instead of averages.
Frequently Asked Questions
Is days of cover the same as days of supply?
In practice yes, both mean quantity divided by average daily usage. Some companies base days of supply on forecast demand rather than past usage, so state which one your report uses.
Which usage period should I use?
Ninety days is a common default for stable parts. Use a shorter window for fast changing demand and a longer one for seasonal parts. Be consistent across the report so numbers can be compared.
Should I use calendar days or working days?
Use the same basis as your lead time. If lead time is stated in calendar days, use usage per calendar day, otherwise convert both to working days. Mixing them overstates cover by about 30%.
What cover is too much?
There is no fixed figure. Compare to lead time plus review period plus safety stock. A cover several times that sum, with no seasonal or strategic reason, is excess stock worth a second look.
Netray can build a live version of this view over your ERP, with open order dates and allocations included, read-only and on your own infrastructure if needed.
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