Launching a plan against out-of-stocks in thirty days: where to start?

Why an order, and not a list

The levers against out-of-stocks are known: ordering, replenishment, facing, book stock, back room, team (how to reduce out-of-stocks on the shelf). The problem is not knowing them, it is launching them without disorganising everything. A four-week plan chains them so that each step makes the next possible: you cannot set reorder points before making stock reliable, nor set targets before measuring.

Week 1: measure

• Choose three aisles to start with: those that weigh most in sales or in complaints.
• Count out-of-stocks twice a day (11 am and 5 pm) on those aisles, with the method in on-shelf out-of-stock rate: how to calculate it. Ten minutes per aisle per count.
• Note the apparent cause of each out-of-stock: stock at zero, product in the back room, positive book stock but nothing anywhere, facing too short.
• Change nothing else this week: the aim is an honest starting measure.

Expected result at the end of the week: an out-of-stock rate per aisle, an order of magnitude for the share of “product in the store but not on the shelf”, and a first list of recurring SKUs.

Week 2: the quick wins

• A late-afternoon replenishment pass on the three aisles, around 5 pm, focused on the twenty fastest movers (organise replenishment).
• Tidy the back room of the three aisles: one slot per family, fast movers near the door, and the rule “nothing waits more than one pass” (organising the back room).
• Keep counting to see the effect.

These two actions cost nothing and act on “product in the store but not on the shelf” out-of-stocks, often the largest share according to Corsten and Gruen.

Week 3: make things reliable

• Start cycle counting on the fifty best sellers of the three aisles, ten a day (cycle counting: twenty minutes a day). Correct stock at every gap.
• Review the reorder points of those fifty SKUs with real sales over the last four weeks (automatic ordering and out-of-stocks).
• Adjust the facing of SKUs that run out every afternoon despite the 5 pm pass (facing and shelf capacity).

This week tackles the out-of-stocks that survived week 2: those of wrong book stock and badly set ordering.

Week 4: install

• The weekly dashboard with the five indicators of out-of-stock dashboard, filled from the counts.
• A target per aisle, realistic from the week 1 measure: for example, from 8% to 5% in three months.
• The department manager’s role formalised, with their three protected daily moments (the department manager’s role).
• Extension to the other aisles, one or two a month, with the same sequence.

What the plan requires

Resource	Quantity	Who
Shelf count	20 min per day per aisle	shelf employee
5 pm replenishment pass	15 to 30 min per aisle	shelf employee
Tidying the back room	half a day per aisle, once	aisle team
Cycle counting	20 min per day	department manager
Reorder point review	2 h, once, then 1 h a month	department manager
Dashboard	30 min per week	store manager or deputy

No tool, no budget. The only prerequisite is the department manager’s time, which usually means taking some shelf filling away from them.

A worked example (hypothetical)

Take a fictional 2,000 m² supermarket applying this plan on grocery, fresh and household. Week 1 measure: 8% out-of-stock on average, about 40% of it products present in the back room or with positive book stock. End of week 2: “product in the store” out-of-stocks have fallen sharply thanks to the 5 pm pass and the tidy back room. End of week 4: the counted rate is around 5%, and the remaining out-of-stocks are mostly supply out-of-stocks, to treat with the warehouse. This scenario describes the expected order of magnitude; the figures are illustrative.

What shopper reporting changes

The plan rests on the shelf count, which takes time and only sees two moments a day. With ShelfAlert, shopper reports provide the week 1 measure continuously, the week 4 dashboard without data entry, and the list of SKUs to count for cycle counting. The plan stays the same; it starts faster. 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.