Out of stock (OOS) is a common phenomena in the fast moving consumer goods (FMCG) market. A study conducted by the National Association of Convenience Stores in the U.S. showed that consumers would typically stop shopping at a certain store after encountering the "out-of-stock problem" for an average of 2.4 times.

The local FMCG sector agrees with the findings. ECR Hong Kong, the local retailers, distributors and manufacturers league in the FMCG industry, kicked started their own industry-wide OOS study in 2002 to examine the stock levels at retail outlets. The study aims to establish a standard OOS definition, to provide data indicating OOS at retail level on a weekly basis, to establish a local OOS benchmark, and to promote co-operation between suppliers and retailers.

Originally designed as a half-year project, the Hong Kong OOS study has now become an on-going project with the backing of the industry and has so far yielded some interesting findings.

Outlet Types    Different types of outlets have their own areas of expertise as reflected by their OOS levels of different product categories. In general, supermarkets were comparatively better in maintaining stocks of grocery and household items, convenience stores in alcohol and drug stores in baby items and toiletries.

Product Categories    A 24-week trend showed improvement and convergence for product categories like alcohol, toiletries and beverages. Some individual lifestyle items displayed supply problems.

Brands Performance    Certain brands demonstrated high OOS levels for bread, dog food, lifestyle groceries, ice cream, snacks and beverages.

The study found that upstream supply chain issues only contributed between 12 percent and 15 percent of the OOS problem, with the prime problems being in the backroom of retail outlets -- the last fifty feet of the value chain.

An increasing number of suppliers and retailers are joining the Hong Kong OOS Study to monitor their product performance and strengthen their weaknesses. Interested parties can contact the Hong Kong Article Numbering Association at info@hkana.org to find out more about the study and supply chain initiatives.