ECR - Efficient Consumer Response Australiasia

Business Background

Manufacturers and retailers, individually and collectively (including at Highlands 2000) have identified Out of Stocks as one of the biggest opportunities for the industry to reduce costs and increase customer value. Anecdotal evidence suggests that the out of stock rate at retail may be 4%-6% or higher, while on fast moving items out of stocks have been quoted as high as 15. Replenishment methods and associated activities are major determinants of the out of stock rate.
The intent of this project was to examine replenishment methods in a variety of trading environments to determine potential efficiency gains, cost savings and improved stock levels for effectiveness in addressing out of stocks and potentially cost and time effectiveness. The project also examined the cause of out of stocks and suggested effective measurement mechanisms and methods of addressing the issue.
Key expected outputs were seen as suggested collaborative process improvements under relevant business models including efficient replenishment, an assessment of the efficiency of those relevant models and a suggested measurement mechanism for out of stocks.

Objective

Deliver an industry report that covers, where relevant, the different methods of replenishment, their efficiency and effectiveness in addressing out of stocks. The report should highlight the causes of out of stocks throughout the supply chain, identify effective measurement techniques and suggest process improvements to reduce out of stocks.
The report should provide a set of materials to facilitate analysis of key drivers of efficient replenishment and of out of stock issues between trading partners.

Project Team

Report

"A Guide to Efficient Replenishment and Reducing 'Stock Outs' within the Grocery Industry"