It’s not uncommon today to see an empty store shelf when shopping. As a consumer, this can be a frustrating experience, especially if the item you need is out of stock. And from a supply chain perspective, an empty shelf is even more alarming, as it represents lost revenue – for both the retailer and the manufacturer. Limited shelf space and a rise in new product introductions have only compounded the problem, making it harder for retailers to keep shelves stocked.
Why has this been a difficult problem to solve?
Of course, one way to solve the problem is to hire more staff to take stock of inventory and replenish empty shelves more regularly. This, however, is a costly way to solve the problem. It is expensive to deploy additional resources to review inventory positions more often, and many retailers have struggled to find the perfect balance between investing in labor and realizing a return on that investment in the form of incremental revenues.