Food Industry Taskforce Identifies Specific Action to Improve On-Shelf Availability

24 Feb 2015 --- Out-of-stocks remain at an eight-percent average rate among food retailers and manufacturers, according to a joint study released this week at the joint industry’s Supply Chain Conference. The new report offers trading partner guidance on solving the concerns of on-shelf availability that extend well beyond lost revenue.

Food Marketing Institute (FMI) and Grocery Manufacturers Association (GMA) commissioned the survey and resulting report as part of their trading partner alliance goals. According to the JDA Software-facilitated study entitled, Solving the Out-of-Stock Problem: A FMI-GMA Trading Partner Alliance Report, the financial bottom line is an equivalent concern to the customer experience. The report notes, “Shoppers say product availability is a top-three reason for where they shop, yet on average, every time a shopper comes into a store, one out of every 12 items on her shopping list, and one out of every 10 or less for promoted items, is not on the shelf.”

In performing the gap analysis, critical areas emerged in the study regarding metrics, processes, organizational issues and technology integration:
·    Metrics —an opportunity exists for standardized processes and measurements;
·    Processes—the report seeks to improve synchronization between retailers and manufacturers regarding event planning;
·    Organizational Issues—identifying clear accountability in order to address the problem; and
·    Technology — Standardization and integration between trading partner technologies.

The report further recommended action items to sufficiently address these gaps:
·    Move the industry toward a baseline definition of on-shelf availability in order to facilitate better communication and standardization for data exchange;
·    Seek agreement between retailers and suppliers on what data should be used for event forecasting;
·    Facilitate collaboration between retailers and suppliers in order to better align timing between issuance of event forecasts and production-scheduling requirements; and
·    Establish thresholds for on-shelf availability and contingency plans for events.