For all businesses that need to provide high availability to keep their customers satisfied, stock-outs are quite simply a nightmare. Dealing with angry customers can send stress levels of your employees soaring. Your order and sales staff will do whatever they can to placate the customer while your purchasing and planning colleagues have to run in circles, begging and pleading with suppliers or manufacturing. Whichever way you look at it, it’s not a pretty picture.
Unfortunately, as much as it would be wonderful to banish the stock-out completely, they are a reality. And it is not necessarily faulty replenishment that is to blame. Predictions for supply and demand will never be completely perfect; the greater the inaccuracy, the greater the risk of stocking out.
How to deal with stock-outs
Perhaps the approach to dealing with stock-outs should be shifted to focus on items that are stocked out prior to the request for the item. NETSTOCK quickly identifies current and potential stock-out items ranked on their value to your business. The call to action for each item is as follows:
Check that the stock-out is legitimate – misleading data can distort the picture and you don’t want to put a plan of action in place based on inaccurate data. Double check the current stock level, and then factor in supplier orders and purchase orders.
Before making plans to find stock, ascertain whether your customer will wait for the stock and for how long. Good communication could save the day!
If remedying the stock-out immediately is the only option, determine what can be done. Is there an opportunity to expedite an existing purchase order or to transfer stock from a nearby location? You may want to consider air-freighting a portion of the order. Can you source from an alternate supplier or even a competitor? This might seem extreme, but may be worth the effort and expense if you can prevent the loss of a sale, or worse still, the loss of a customer.
Most importantly, resolve why the stock-out occurred and avoid repeating the same set of circumstances. Constantly working to resolve the root causes has proven to reduce the occurrence of stock-outs over time.
What if you could identify potential stock-outs?
Eventually, as your stock-outs diminish, you can start to focus on items that are predicted to stock-out based on the forecasted usage within the lead time period. NETSTOCK is designed to highlight these items, and by following the same steps above, you may be able to avoid the stock-out altogether. Proactive management of potential stock-outs can transform crisis-style inventory management into inventory management excellence!
See our previous blog in this series: Do you have time to transform your business?