Checklist for monitoring On-Shelf Availability

According to independent studies, the average out-of-stock (OOS) percentage ranges from between four and eight percent worldwide. This is resulting in billions’ worth of lost sales plus dissatisfied shoppers and trading partners. The costs of on-shelf availability (OSA) problems are colossal. Supply Chain Movement and software vendor NeoGrid have put together this checklist for monitoring OSA to continuously maximise your sales.

When a desired product is not on the shelf in a store, the shopper buys a substitute or may even leave the store empty-handed. On-shelf availability is crucial to the profitable flow of goods in the supply chain, especially in the fast-moving consumer goods business.

Metrics

When a stock item does not sell as expected at a particular location, the information accuracy, forecasting/demand planning, supply chain and store execution issues should be examined in order to determine where the OSA problems lie. This includes looking at the root causes of the lost sales value in the form of key performance indicators (KPIs).

Root Causes

There can be various root causes for shoppers failing to find their favourite product on the shelf. For example, there could be inaccurate information due to phantom inventories, or the forecasting for promotions, seasonal ranges or new product introductions could be poor. Daily OSA analysis should include consideration of KPIs including negative stock, phantom stock, in store but not on shelf, forecasting issue, order not delivered, order not placed, unidentified issue and waste/shrinkage issue.

Call to action

OSA can give you personalised insight into how much money you are losing compared to sales and can help you to prioritise and solve the problems based on their financial impact. Your daily OSA KPI analysis could reveal that the information is inaccurate, in which case the issue could need to be physically investigated. There might be a forecasting issue, in which case forecasts and methods used should be reviewed to ideally incorporate collaborative demand planning. Perhaps there is a supply chain issue relating to ordering or deliveries between a store and its distribution centre and/or suppliers. Last but not least there could be a store execution issue, requiring investigation into why some items have been left in the back of the store, for example.

Download: Checklist Monitoring On-Shelf Availability

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