Nobody wants in-store customers to see the shelf tag for their favourite product on its own with nothing stocked above it. When a customer walks down the aisle and notices that their items are absent, they will either leave unhappy and buy a substitute that isn’t what they really wanted or they will visit another store to find what they need.
Fortunately, vendor managed inventory (VMI) technology enables suppliers and retailers to exchange data to boost their respective competitiveness and maintain stocked shelves in a quicker and more effective manner. This on-shelf availability solutions is a big relief to the supermarkets these days. Even when managing a wide range of partners and locations with a significant number of brick-and-mortar locations, suppliers can aid their retail partners by taking responsibility for enhancing on-shelf availability.
What Is On-Shelf Availability, and Why Is It Important?
On-shelf availability, which measures the number of products that are available for customers to buy in a saleable state, is a crucial indicator of the customer experience. When your items are consumer packaged goods, which include consumables and perishables that require frequent replenishment, it becomes an even more crucial statistic.
Retail establishments are better able to regularly satisfy client needs and avoid disappointing them when their inventory availability is high. Your collaborations become extremely useful when you, as the manufacturer or supplier, can assist them in enhancing shelf availability and minimising supply disruptions since you enhance the consumer experience, which increases sales.
In the past, only retailers were in charge of overseeing the product that was on the shelves. Periodically, they would inventory their stock and, using their own sales projections, place orders for replenishment. This is the conventional method of replenishing, and human judgement errors may creep in this way.
Retailers may place inadequate orders. When companies order too many perishable goods for their market, they run the risk of filling their storerooms with unsaleable items or producing waste. They can place an order too late and not account for lead time. They might not account for seasonality correctly. There are several potential problems. Fortunately, there is technology to solve all of these frequent issues.
How VMI Can Improve On-Shelf Availability
By utilising the data that their retail partners share with them, VMI is an AI/ML-driven system that gives suppliers visibility throughout the supply chain. VMI streamlines information flow and has a wide range of sophisticated capabilities that make doing business with retailers easier.
Collaborative replenishment, or VMI, is a particular sort of replenishment that employs shared data from suppliers and buyers to improve recurrent orders. The model is important because it takes a proactive approach as opposed to a reactive one. The manufacturer or supplier will be in charge of placing orders to replenish inventory rather than the retailer or distributor, who would do it based on their assumptions. They keep an eye on the retailer’s inventory levels and refill their own stock in accordance with agreed-upon benchmarks and objectives.
While a maximum shelf presence option informs the supplier of the amount of stock the retailer wants, a minimum shelf presence setting can assist suppliers in knowing when to replenish. Store selections and promotional activities, which can impact when and how much goods needs to be delivered, are additional factors that are taken into account by VMI calculations.
The data is continuously processed and evaluated, so the signals that suppliers get when it’s time to restock are automatic. In order to ensure that your retail partners always have the proper products on hand, VMI analytics help you maintain a balance between overstocking and understocking.
Forecasting demand is another VMI strength. Advanced VMI quickly detects shifts in demand and can assist suppliers in maximising sales for both slowly and quickly moving goods. Recent VMI trends indicate that some retailers may be communicating their own projections to suppliers in order to get a competitive advantage.
