Understanding Supply Chain Visibility Indicators

For retailers and manufacturers, monitoring some visibility indicators is essential for proper supply chain management. Learn more about them and what they represent:

OUT-OF-STOCK: shows the percentage of product shortage related to total items in a store, regardless of demand.

INVENTORY TURNOVER: Number of times that inventory is renewed during the year.

VIRTUAL INVENTORY: Shows the difference between the number of products in the store’s information system and the amount that, physically, is available for sale to consumers.

STOCK COVERAGE: Number of days that inventory can cover consumer demand.

OSA (On Shelf Availability): Measures, daily, availability of products on the shelf, based on demand. In other words: shows the percentage of times the consumer tried to find a product and it was available on the shelf.

LOST SALES: Represents the percentage of lost sales due to product shortages on the shelf. In this case, it shows the percentage of times the consumer tried to find a particular item and it was not available on the shelf.

OSA also shows the causes of product shortage:

– STORE EXECUTION: This indicator shows that the failures occurred at the point of sale itself, more specifically, due to two factors: shelf not replenished (the product was available in the store’s physical inventory, but the shelf was not replenished) and virtual inventory. 

– LOGISTICS: Indicates that the products were not available at the retailer either because the retailer did not request them to the supplier or due to delivery failure.

Download our retail supply chain collaboration white paper to learn the seven most important criteria in selecting a new supply chain platform.