2008 has been a topsy-turvy ride for most U.S. businesses, which has made it increasingly difficult to gauge just how well you’re doing (or not doing).

Transportation and fuel surcharges went from through-the-roof back to ground level. Shipping rates are all over the map.

So, short of wetting a finger and putting it into the wind, how can you get an accurate measure of where you stand?

At least one new report is using a stat called Days Inventory Outstanding (DIO). (The metric is being championed by CFO magazine and REL, part of the Hackett Group.)

Many inventory operations measure progress by tracking the number of inventory turns in a given time. This is almost the opposite of that.

How it works: Take your company’s year-end inventory level, divide that by total revenue, then multiply that figure by 365. The result is how many days’ worth of sales your company, on average, holds in inventory.

Why is this measure taking on more significance?

It’s the growing emphasis on “supply chain finance,” and the overall role and impact inventory has on your company’s bottom line.

Suppose you do calculate your DIO. How do you compare with other businesses?

• communications/network equipment: DIO down from 37 to 32 days (15%)
• consumer packaged goods: DIO up from 40 to 42 (5%)
• containers and packaging: DIO up 43 to 46 (6%)
• department stores/mass merchants: DIO up from 62 to 64 (4%)
• electronics: DIO down from 45 to 42 (8%)
• food and drug retailing: DIO up from 27 to 29 (8%)
• internet and catalog retail: DIO down from 20 to 19 (4%)
• life sciences/medical devices: DIO down from 43 to 41 (4%)
• metals industry: DIO down from 52 to 49 (5%)
• pharmaceutical industry: DIO down from 45 to 41 (9%)
• restaurants: DIO up from 5.5 to 5.8 (5%)
• specialty retailers: DIO down from 54 to 52 (4%), and
• wireless/cell phone industry: DIO down from 11 to 9 (16%)

Tags: days inventory outstanding, DIO, fuel surcharge, inventory