Solving The Out-Of-Stock Dilemma

Three major issues need to be addressed: data accuracy, measurement and shelf merchandising practices.


We've seen very significant progress result from small targeted efforts. Don't allow the size of the project to stall your progress. Think small and you can win big.

Gruen: New measurement systems that estimate OOS using POS data need to be implemented by retailers. This approach to OOS measurement calculates the lost sales due to OOS and allows the retailer to focus on the most costly OOS items. Additionally, this data also provides identifiable patterns of OOS for given items that point directly to the root cause of the OOS (thus directing the retailer towards a solution).

Efforts with "data synch" (collaborative synchronization of data between suppliers and retailers using a third party vendor) have been successful in improving item data accuracy and this drives lower OOS. Related to this is the issue of ordering and inventory accuracy.

Improvements in PI accuracy can cut OOS in half. Reworking planograms to account for the demand of the faster moving (and high OOS) items can reduce the level of OOS and the store labor necessary to continually restock these items. Basic retail practices that encourage three well-known links to OOS need to be enforced: one, don't cover holes; two, don't hide product and three, shelf tag accuracy. In a new study we found that simple adherence to these practices had a huge effect on OOS, reducing OOS levels by about 40 percent.


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