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Demand & Supply Chain Management Evolution

Document Detail
Language: English

Why Retailers are Skeptical of New OSA and POS Planning Initiatives


Company: BlueYonder
Tag: Retail
OSA - On-Shelf Availability

This Flash Forward considers a new approach to solving the "On-Shelf Availability" (OSA) issues that retailers face and some of the obstacles they have historically been saddled with. We will examine some of the prior pitfalls and inhibitors to success and recommend actions that will lead to a winning scenario.

1. The OSA Challenge
To all my comrades in Retail - Merchandising, Category Managers, Buyers, Supply Chain Planning, VP of IT/CIO and Inventory, VP of Marketing - I remember when POS (point of sale) became available and enabled true visibility into what sales really were. It was clear at the time, now that real demand was known and once it was shared with planning and your manufacturing partners/suppliers, that out of stocks would disappear and on-shelf availability (OSA) would soar. Even if the POS data was deemed too proprietary to share, it was believed that internal planning alone would be enough to dramatically improve the OSA situation.

2. The Issues
So, where did we go wrong and what happened? The outcome to date has never lived up to the promise. The percentage of out of stock for normal demand items is still running at about 8% and for promotional items, about 10%-15%. The truth is that not much has changed. You’ve either provided, or been hounded to provide, your POS data to your partners. You’ve been on committees and task forces to understand why OSA improvements can’t be solved, with the results typically being that it's due largely to the well documented contributing factors that appeared to be beyond the control of those involved. Because of the challenges, even the ownership and responsibility for solving the OSA problem has been nebulous. From a practical career standpoint, who would want to own the OSA improvement initiative? It was and remains a “no-win” situation.



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