The ECR Community Shrink & OSA Group is a retailer-manufacturer working group focused on creating imaginative new ways to, together, better manage the problems of on-shelf availability, shrink and food waste.

Their latest research on the problem of inventory record inaccuracy has aimed to answer three questions:

  1. To what extent are inventory records wrong?
  2. How does inventory record accuracy deteriorate over time?
  3. How does an improvement in inventory records affect sales?

The ECR explain that achieving retail growth in mature markets is not easy, however the evidence that that they have put forward demonstrates that growth can be found simply by making inventory records more accurate.

Their findings confirmed that for the retailers in the study 60% of inventory records were wrong, and that when the inventory records were corrected, sales could increase by 4 – 8%.

One of the authors, Yacine Rekik is Professor of Operations & Supply Chain Management at emlyon business school, France. The principal purpose of his research is to develop models that provide qualitative and quantitative insights into the impact of inventory inaccuracies and the benefits of RFID technology on the performance of supply chains in terms of cost reduction and/or improvement of service levels.

Operationalised suggestions were summarised which include a recommendation to rethink the purpose of stocktakes, since these are not (only) a necessity, they are an opportunity to reach better strategic decisions in increasing sales; and trading such uplift off with the investment needed to achieve it.

Click here to view a recording of the webinar or to view the webinar slides.