The Supply Chain Digest's editorial staff recently wrote an editorial on the "Out of Stock" problem faced by Consumer Goods companies. They noted:
"In fact, inventory levels in consumer goods manufacturers stayed flat throughout most of the 2000s, and out-of-stock levels at the shelf have also been resistant to improvement. A well-publicized 2007 study by Dr. Thomas Gruen of the University of Colorado and Dr. Daniel Corsten of the IE Business School Madrid, based on funding from Procter & Gamble, estimated that manufacturers lose something close to $100 billion in sales annually due to out-of-stocks at the shelf.
Solving the out-of-stock challenge can therefore pay big financial dividends - especially for the companies that can reach new levels of in-stock performance first, before competitors do."
The editorial discusses areas where IBM is helping firms solve this problem by better optimizing inventory.
"In fact, according to Remzi Ural, a supply chain lead in IBM's global consumer packaged goods practice, one beverage company IBM recently worked with was able to increase its sales by 12.3 million cases by significantly reducing its out of stocks, in this case throughout its distribution network that served local stores "
This was based on a videocast we did with SCDigest.