819761

Q1
Supply chain collaboration between retailers and suppliers is very
important. If the business is lack of collaboration between partners, the
industry as whole needs to improve its levels of collaboration to better
address on-shelf availability in the future.
According to Chopra and Meindl (2007), on-shelf availability is a
situation in which an item is available for sales on shelf when a customer
enters the store to purchase it. On-shelf availability required getting the
right product to the customer at the right time. This is a critical factor in
the retail world, and impacts retailers' revenues and profitability. Besides
that, on-shelf availability of goods is a primary objective of retailers, who
play a vital gate-keeping role in product supply chains. Fernie and Grant
(2008) added that on-shelf availability helps retailers enjoy store loyalty
when customers experience reliable supply of stock on the display shelves.
Maintaining on-shelf availability implies preventing out-of-stock
occurrences. Out-of-stock occurred when customers fail to locate the
desired product in the store (Gruen and Corsten, 2007). It occurred in the
case of fast moving and promotional items. These situations can be traced
back to inadequate information sharing among stakeholders. It suggests
effective distribution channel management where stocks are continuously
available at the retail stores (Kucuk, 2004) as well as good in-store
practices that result in satisfactory customer service (Schary and
Christopher, 1979).
The effectively of on-shelf availability depends on how efficiently
retailers manage some of the top supply chain challenges in the areas of
inventory reduction, and warehouse and transportation efficiency. Retailers
must clearly identify the root cause of out-of-stock scenarios and
understand what the impact could collaboration in supply chain haves in
the field of transportation and also warehousing in improving on-shelf
availability.

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From a retailers perspective, logistics means the successful
management of the costs of transportation, handling and storage, whilst
ensuring high on-shelf availability (Fernie & Sparks, 2009). This is typically
accomplished through collaboration and integration across functions in the
supply chain, from the supplier, via central warehouse and further on to
the store and the shelf. In many of the companies there is not one
department that has the entire control of all activities in this critical
process. The central warehouse is normally responsible for the inventory
carrying costs and the handling costs in the central warehouse, and
manages the physical picking, packing and transportation to the store, the
responsibility for call-offs and decisions concerning order quantities could
be managed by the stores individually, or by a sales department centrally.
The

logistics

transformation

derives

from

cost

and

service

requirements as well as consumer and retailer change (Fernie and Sparks,

1998). If the element of logistic is not controlled effectively, it can be
remarkably expensive. Holding stock or inventory in warehouses just in
case it is needed is a highly costly activity. The stock itself is expensive
and might not sell or could become obsolete. Warehouses and distribution
centres generally are expensive to build, operate and maintain. Vehicles to
transport goods between warehouses and shops are expensive, in terms of
both capital and running costs. There is thus a cost imperative to making
sure that logistics is carried out effectively and efficiently, through the
most appropriate allocation of resources along the supply chain.
At the same time, there can be service benefits. By appropriate
integration of demand and supply, mainly through the widespread use of
information

technology,

retailers

can

provide

better

service

to

consumers by, for example, having fresher, higher quality produce arriving
to meet consumer demand for such products. With the appropriate
logistics, products should be of a better presentational quality, could
possibly be cheaper, have a longer shelf life and there should be far fewer
instances of stock outs. Reaction time to spurts in demand can be radically
improved through the use of information transmission and dissemination

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technologies. If operating properly, a good logistics system can therefore
both reduce costs and improve service, providing a competitive advantage
for the retailer.
In conclusion, retailers and other players in the value chain are now
devoting greater resources and efforts to manage on-shelf availability.
They are also increasingly acknowledging the need for collaboration with
supply chain partners to improve on-shelf availability, and thereby
increase revenues and sustain customer loyalty. Retailers, manufacturers,
and supply chain partners that embrace an integrated, cross-industry
approach can address the challenges impacting on-shelf availability
effectively.