For retailers and manufacturers, monitoring some visibility indicators is essential for proper supply chain management. Learn more about them and what they represent:
OUT-OF-STOCK: shows the percentage of product shortage related to total items in a store, regardless of demand.
INVENTORY TURNOVER: Number of times that inventory is renewed during the year.
VIRTUAL INVENTORY: Shows the difference between the number of products in the store’s information system and the amount that, physically, is available for sale to consumers.
STOCK COVERAGE: Number of days that inventory can cover consumer demand.
OSA (On Shelf Availability): Measures, daily, availability of products on the shelf, based on demand. In other words: shows the percentage of times the consumer tried to find a product and it was available on the shelf.
LOST SALES: Represents the percentage of lost sales due to product shortages on the shelf. In this case, it shows the percentage of times the consumer tried to find a particular item and it was not available on the shelf.
OSA also shows the causes of product shortage:
– STORE EXECUTION: This indicator shows that the failures occurred at the point of sale itself, more specifically, due to two factors: shelf not replenished (the product was available in the store’s physical inventory, but the shelf was not replenished) and virtual inventory.
– LOGISTICS: Indicates that the products were not available at the retailer either because the retailer did not request them to the supplier or due to delivery failure.