It is easy to see an empty shelf and conclude that someone failed to order enough.
Sometimes that is exactly what happened.
But an out-of-stock can have many causes:
- the item was never ordered,
- the order was cut,
- the warehouse was out,
- the product was received but not stocked,
- the product is in the wrong location,
- the inventory count is wrong,
- the shelf capacity is too small for the sales rate,
- the order cycle does not fit demand,
- a promotion was not planned correctly,
- the item is selling faster than its historical movement,
- or the product was damaged, spoiled, or stolen.
That is why simply increasing an order quantity can sometimes create a second problem instead of fixing the first.
For recurring out-of-stocks, trace the item backward:
- Was it physically in the building?
- Was it on the last order?
- Was the order quantity reasonable?
- Was it shipped?
- Was it received correctly?
- Is the book inventory accurate?
- Is the shelf capacity appropriate?
- Did demand change?
- Is the item repeatedly being missed during stocking?
The empty shelf is where the problem becomes visible. It is not always where the problem started.
What is the most common cause of preventable out-of-stocks in your store?