Organising the back room so the product gets back on the shelf before the out-of-stock

The back room, blind spot of out-of-stocks

In the study by Corsten and Gruen, a large share of store-caused out-of-stocks are products present in the store but not on the shelf: delivered, received, and waiting in the back room. For the inventory system, all is well: book stock is correct. For the shopper, the product is missing. These out-of-stocks are the most frustrating because they cost nothing to fix, except organisation.

The four symptoms of a back room that creates out-of-stocks

1. Replenishment looks for a product for ten minutes, then gives up.
2. A started pallet stays three days because it was pushed to the back.
3. The product is on the shelf in another aisle than its own, or in an unlabelled case.
4. Book stock is correct, the shelf is empty, and nobody knows why.

If any of these symptoms is regular, the back room is a cause of out-of-stocks in its own right.

The rules that work

Arrange in aisle order

The back room reproduces the store plan: the sweet grocery zone of the back room matches the sweet grocery aisle, in the same order. The employee preparing a replenishment pass follows a route, they do not search.

One fixed, labelled slot per family

Each product family has its place, marked on the floor or the rack. A pallet that arrives goes to its place, not to the first free spot. It is the hardest rule to keep on big delivery days, and the most profitable.

Fast movers near the door, at waist height

The twenty best sellers of each aisle are the ones reloaded most often. They go closest to the back-room door, between knee and shoulder, never high up or at the back. Access time matters more than volume.

Flag what is waiting

Every waiting pallet or roll cage carries a label with the date and the aisle. A five-minute back-room round in the morning lists everything that has waited more than one replenishment pass: that is the list of what must go out first.

Nothing waits more than one pass

The rule that sums up the others: a delivered product must be on the shelf by the next replenishment pass. What cannot go up (shelf full) is flagged to adjust the facing or the order, as explained in facing and shelf capacity by sales velocity.

Back room and book stock

The back room is also the first place where phantom stock is born: an open case half of which has vanished, breakage thrown away without recording, a product put in the wrong place and “lost”. A tidy back room makes twenty-minute cycle counts possible; a messy one makes them impossible. The link is explained in phantom stock: what to do when the book stock says the product is there.

An example

1,800 m² supermarket, 250 m² back room. Before: arranged by delivery arrival, 45 minutes of replenishment per aisle in the morning, 18% of out-of-stock reports concerned a product present in the back room. After a month of arrangement by aisle with labelled slots and fast movers near the door: 30 minutes of replenishment per aisle, and 6% of reports concern a product in the back room. The quarter of an hour saved per aisle paid for a late-afternoon replenishment pass.

What shopper reporting changes

Every ShelfAlert report compared with book stock identifies the products “present but not on the shelf”, hence in the back room or misplaced. The morning list of products to bring out of the back room is written from the previous evening’s reports. 14-day trial, no payment card: see the plan for store managers.

Sources

• Corsten, Gruen, “On Shelf Availability”, 2004: summary.
• Gruen, Corsten, Bharadwaj, “Retail Out-of-Stocks: A Worldwide Examination”, GMA, 2002: full study (PDF).
• DeHoratius, Raman, “Inventory Record Inaccuracy: An Empirical Analysis”, Management Science, 2008: abstract.