Consumer Clout

Posted on 30 Jun 2010 by The Manufacturer

A major debate on July 8 will bring supply chain magnates together to discuss the power of demand and the value of on shelf availablility.

The debate, which will be led by supply and logistics leaders from companies such as Pepsi, Tesco and Cadbury’s follows an extensive study into supply chain trends by specialist consutants SCALA. The survey and other research revealed that consumer perception of the on shelf availablility of brand names frequently puts 46% of sales at risk.

This statistic poses a warning and a challenge to suppliers to ensure timely delivery of products and the ability to react with agility to changes in demand. Staggeringly however, nearly a sixth (15%) of the major multi-national brands surveyed reported no idea of what levels of on shelf availability they achieve, while the remaining 85% admitted to holding only vague estimates. The research also revealed that over a quarter (26%) of brands did not view on shelf availability as a key success factor for their company, and a third (33%) didn’t have on shelf availability as a key KPI. This raises serious concerns around industry capability to control and influence availability to the consumer.

The high profile survey investegated 1000 grocery and FMCG consumer purchasinghabits across a broad selection of brands. John Perry, managing director at SCALA said: “The research provides evidence that low on shelf availability directly correlates to loss of sales and customer loyalty, with consumers revealing that if on any one visit their product is not on the shelf, they will simply pick an alternative. “

The debate on July 8, at Wroxal Abbey in Warwickshire, will bring supply chain players together to discuss how better collaboration and relationship management within supply chains and networks could help to imporve product availability to the consumer, boosting collective profits and giving greater visibility of end consumer pull from end to end of the supply process. Among other things this will require a change to accepted business and process metrics and an improvement of data sharing up and down the supply chain.

Many companies who have already integrated awareness of their on shelf availablility into their operations have been able to use it as a motivation for leaning their inventory and supply processes. Shepherd Neame breweries, for example, are now communicating strongly with supermarket customers about their performance in on shelf availability. Theyu use this a as a key business metric to drive the reengineering of logistics practices and, most importantly, to win business.

With collaboration as the key issue it is important to also remember that improved communication with supply partner is not only about improving internal operations. Neil Ashworth, Supply Chain Director at, who will be one of the speakers leading the debate admits “The margin for human error in the last 50 metres to shelf can ultimately determine the reputation of our favourite brands. This final stage en route to maintaining high levels of on shelf availability between a product being taken off the shelf and being scanned through the till is the least efficient stage of an otherwise highly refined process.”

Although over 90% of surveyed brands collaborated to varying degrees with their major retail customers, only 19% viewed their collaboration levels as extensive. Ashworth contunues “Supply Chain Collaboration is a perennially pertinent issue facing FMCG brands and retailers alike as both strive to deliver improved levels of on shelf availability and maximise customer satisfaction and sales opportunities in an increasingly competitive market. Whilst there are multiple case studies that demonstrate that significant gains can be achieved by suppliers collaborating and working closely with the retailers, it would seem a common problem for many that highly sophisticated networks break down at the final on-shelf moment of truth.”

If you would like to join the debate on July 8 please contact Paul English on [email protected], call 0184 437486 or visit Tickets are priced at £75 (+VAT) for CILT members, or £125 for non-members.