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On Shelf Availability:

How not to loose sales?

Today we will talk about lost sales and the most important indicator for an FMCG company - availability of goods on the shelf.

Failure can occur at any part of the chain of movement of goods from production to the end buyer. But there is a situation that blocks all the efforts of the manufacturer, distributor and retailer: if the product is not on the shelf, there will be no sale. Therefore, maintaining the OSA level (On Shelf Availability) remains the most important task of distribution.

The role of the OSA
  • 46% of buyers, in the absence of a product on the shelf, purchase a competitor's product.
  • An increase in OSA by 3% leads to an increase in the manufacturer's turnover by 1%.
Everyone makes mistakes
Reducing lost sales does not require significant investment and seems to be one of the obvious ways to increase profit. All well-known FMCG manufacturers are building processes to maintain OSA. But not everyone succeeds in achieving the goal. Why?
Causes of Low OSA:
  • Mistakes of employees of the trading floor;
  • Errors in the auto-order system;
  • Logistics failures from PC to retail outlets;
  • Failures in the goods delivery from warehouses of finished products;
  • Mistakes, mistakes, mistakes.
How to increase OSA systemically
Theoretically, product availability tracking can be fully automated. We know several pilots of such projects. In practice, the largest FMCG players continue to rely on auditors and merchandisers. Good news is that we can give an employee a convenient tool for data collection, to automate routine and minimize errors.

How to track OSA with Technopeak solution
1. Electronic forms: basic technology
At the beginning of the visit, the merchandiser notes the missing goods in the mobile application, and only after that proceeds to the layout on the shelf. The TECHNOPEAK SFA system automatically calculates the OSA indicator and transmits it to the central database.

2. Barcodes: speeding up the process
The stage of manually entering information is replaced by scanning barcodes. The employee scans all the products on the shelf, the TECHNOPEAK system compares the scanned list with the matrix of the point of sale and automatically calculates the OSA.
3. Image Recognition: Artificial vision
Another step towards avoiding manual labor. The merchandiser photographs the shelf, the neural network recognizes the goods, compares with the matrix and calculates the OSA. The technology is convenient and easy to use, all work is carried out from a single window of the TECHNOPEAK /Agent application, but there are limitations — for some products, for example, sausage and loose candies, IR is not yet applicable.

4. Collaboration with the retailer
Retailers are also suffering from lost sales and are trying to implement tools to increase OSA. Some large chains have launched services that track OSA based on data from cash registers. If the absence of goods on the shelf is predicted, the service transmits information to the TECHNOPEAK system, and a task appears in the merchandiser's tablet to lay out the goods. So far, the technology is being used in test mode, but it is considered promising.
Let's summarize
The OSA indicator is one of the most important for the manufacturer. Prompt response to situations of unavailability of goods on the shelf significantly improves sales.
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