Supply Chain Blog

Improve your Supply Chain by celebrating “Out Of Stocks” (OOS)

Posted by Dave Jordan on Mon, Apr 08, 2013

Out of stocks? Excellent news and a huge relief for all!

A celebration party or at least a few drinks would be the next immediate priority but only after a bath or shower. Being sentenced to the stocks in medieval times was a very public humiliation but certainly low cost and probably more effective. Stocks were popular across the world and their official use did not die out until the early 1900’s.

Those found guilty of crimes would be locked in one uncomfortable position for days or weeks in all weathers. The fun part though was as the crimes were usually committed against the general public that same public took great delight in throwing as much – let’s call it “stuff” – at the stock incumbents. Anything was fair game to be thrown or poured over these local miscreants.

Inventory stocksThose who commit crimes today and benefit from soft Community Service Orders might think again if they were sentenced to sit in wooden stocks in the town opposite the pub they misbehaved in or shop windows they smashed. In fact, if the stocks were placed next to waste recycling skips and a fast food outlet you could make a thoroughly entertaining day out of it. “Hey kids, should we go to the beach or have a burger and throw waste at the prisoners?” My Marigold’s would be snapped on in seconds.

In FMCG/Brewing/Pharma-land being out of stocks (OOS) generates quite the opposite emotion. No celebration or relief, just the knowledge that a valuable consumer walked away with a competitor product. Consider the infrastructure you have employed to bring your product in front of the consumer face and the dismay should be heavy.

In all three sectors there are multiple alternative purchase options. If you want a chocolate snack then you want it now. If you want a beer or wine with dinner you are not going to wait until you return home. If you have a headache you are not going endure the pain until your regular paracetamol is available. Consumers make purchase decisions in real time and you do not receive a second chance.

There are many causes of OOS including pure human error or simple transport problems but regular OOS occurrences require a thorough review:

Forecast Accuracy – valuable if calculated by SKU and with data available quickly so reparative actions can be taken. Hearing about poor accuracy 6 weeks after it happened is a complete waste of time.

Sales & Operational Planning (S&OP) – is your process robust and takes innovation and demand from all channels into account? Do you operate to one set of numbers or are different departments chasing different targets?

Route to Market (RTM) – whether this is for Traditional Trade (TT) or Key Accounts (KA); is your deployment efficient and fit for purpose. When did you last assess the relevance of your network?

All these elements and more affect your ability to minimise OOS and maximize sales and all require team effort to drive success.

I leave you with a motivational thought. What if those responsible for OOS were placed in wooden stocks for a few hours in the canteen area? Pass me the Marigolds!

Image courtesy of Ambro at FreeDigitalPhotos

Tagss: Dave Jordan, Humour, Inventory Management & Stock Control