ECR - Efficient Consumer Response Australiasia

The publication is intended as an operational guide that is applicable across a variety of trading environments and provides an improvement path for companies with varying levels of experience and capability. The concepts in this guide reflect the conclusions of studies in Australasia and the USA that were accessed in the preparation of the report. Anecdotal evidence suggests that the stock out rate at retail may be 5%-10%, while for fast moving consumer products and during periods of high demand, stock outs may reach 15% or higher.

The project identified that the impact of stock outs is threefold:

• cost of lost sales to retailers, estimated between $500 million — $1 billion per annum;
• cost of lost sales to manufacturers, estimated between $450 million — $750 million per annum;
• manufacturers and retailers can lose end consumers or repeat buyers.

Manufacturers and retailers will benefit from the analysis of the replenishment process, organisational requirements and enabling systems to reduce stock outs and improve consumer satisfaction. While the majority of root causes of stock outs appear to lie in-store, the greatest benefit is likely to be achieved through the collaborative efforts of all trading partners.

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