From the course: Supply Chain and Operations Management Tips

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Avoid inventory stockouts

Avoid inventory stockouts

From the course: Supply Chain and Operations Management Tips

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Avoid inventory stockouts

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- Not long ago I stopped at the store to buy three things, copier paper, a calculator, and some file folders. But on the spot on the shelf that was supposed to have the file folders it was empty, I couldn't buy them because of an inventory stockout. Stockouts are a much more serious problem than many people realize, they cost your company money and they indicate a problem with your supply chain. So let's dig into the root causes to help you avoid stockouts in your own supply chain and let's start by looking at the cost of that stockout of file folders. The store made a series of investments that will only pay off if I come in and make a purchase. They found a supplier for file folders and built a logistics infrastructure to ship folders into all of their stores. They spent money to hire associates and operators and they spent money on advertising so that I would choose to shop there. But if they have a stockout when the customer arrives they've lost that sale and since I need to go to…

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