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Every stockout tells us a story.
Every instance of a stockout provides a sharp critical feedback on our supply chain capabilities. It tells us that the current level of capabilities is inadequate as they couldn’t meet consumer expectations.
Companies respond to these stockouts in two different ways. Some companies develop a nice analytics dashboard to check the dispersion of stockouts, their frequency, cut it product wise, geography wise, time wise, hoping that the analytics would reveal the root cause of stockouts.
Other companies take each stockout as an opportunity to improve their supply chain capabilities. They find out whether they need sharper demand sensing, or improve the flexibility and responsiveness at the granular level in that product, geography or distribution channel.
The way we respond to stockouts holds the key to supply chain excellence.