Out of Stock Analysis of FMCG

Products in Retail Stores

Submitted By:
Group 2 (Section 3)
Aman Jain (2015PGP115)
Jevaji Sidhartha (2015PGP133)
Puneet Agrawal (2015PG147)
Raaj Bajaj (2015PGP124)
Sumit Mittal (2015PGP105)
Tejas Jalan (2015PGP160)

Brief of Project
In order to reduce the loss of goodwill for the companys perspective and
consumer purchasing effort from retailers perspective, managing the Out of
Stock (OOS) situation is becoming one of the priorities of companies and
retailers. Bearing in mind all negative effects of low product availability, i.e. out-
of-stock situation, especially for retailers, FMCG product availability is been
studied from the aspect of different product and/or store characteristics. The
project will aim to define the OOS Metrics, Identifying the root causes, and
provide strategic plans to reduce the OOS cases for FMCG products in Regatta
Store (Laitumkhrah, Shillong) and Batz Store (Nongthymmai , Shillong).

Reason for choosing the project

The main motive behind the choosing this project is to understand the cause and
impact of stock out situations of FMCG products in retail stores and then prepare
a strategy to minimize the OOS rates. The aim of the project is to provide a guide
to FMCG retailers that seek to reduce their cost associated with OOS items, while
simultaneously enhancing shopper satisfaction with sustained lower levels of
OOS.

Methodology
The project would involve primary research in different retail stores in Shillong
(Regatta Store, Laitumkhrah and Batz Store, Nongthymmai) to obtain data from
POS terminals for FMCG products over period of January June 2016. Then to
assess OOS product ranking would be developed. Then we define the targeted
amount of OOS reduction and identify top products that need attention. Finally,
application of identified solutions in assessment of the specific products would be
done.
Action Plan
The action plan for the project would involve following steps:
1) Clarifying the definition of the out of stock as per the shelf, store, and
distribution centre levels.
2) Identifying root causes and solutions.
3) Preparing research methodology and plan for lowering the OOS rates.
4) Getting and maintaining the lower levels of OOS by benchmarking and
best practice analysis

Expected Outcome
The project would serve as a significant information resource for retailers and
their suppliers decision making related to increasing product availability and
organising logistic operations in retail stores.