Out-of-Stock (OOS) indicators show the percentage of product shortage related to total items in a store.
This product shortage in the supply chain impacts consumers, who stop buying the product because it’s not available on a store’s shelf. To avoid this, manufacturers and retailer should join forces in a collaborative effort to minimize OOS in retail. But how do we ensure that products are available on the shelves?
There are good practices and technologies to manage OOS in supply chain management, with which actions can be taken to prevent OOS:
1. Monitoring the inventory level of products at stores: Through inventory reports, it is immediately known which particular item sells more or faster. All can identify in advance a possible product shortage at a particular store and offer the retailer restocking in timely manner, thus preventing OOS, which result in unsatisfied consumers and loss of sales.
2. Identifying phantom inventories (an inventory item considered to be on-hand at a store, but that is actually not available). In a report, it is possible to highlight phantom inventories and take actions focused on this issue.
3. Encouraging retailers to count the physical phantom inventory items and correct the amount in the management system collaboratively.
It is important to have reports that show the OOS trends by region and store to monitor the effects and support the decision making of those responsible for supplying the store. The ideal scenario is to use a daily report with the main OOS items by product and by store.
Collaborative supply chain management technology helps tremendously improve the OOS in the entire supply chain down to the store level. With preventive measures and in a timely manner, it’s possible to keep the products available on the stores’ shelves with little effort, generating positive results and satisfaction for all: manufacturers, retailers and the end consumer.