OSA: How are CPG's helping Retailers Reduce Shelf Out of Stocks?

Our 2025 discussion on how Consumer Packaged Goods (CPG) companies are supporting retailers in improving On-Shelf Availability (OSA) provided several key insights and actionable takeaways for both industries. Below are the critical points:

1. The Importance of OSA and Its Strategic Role

• OSA is vital because if products are not available on shelves, retailers cannot sell them, impacting revenue and customer satisfaction.
• The global CPG business that kicked off the meeting places execution at the heart of its framework, recognizing that availability is responsible for 50% of in-store opportunities.
• The industry is moving from manual to automated OSA measurement, improving accuracy, efficiency, and actionability.

2. Transition from Manual to Automated Measurement

• Traditional manual measurement methods such as image recognition and physical audits are limited, as they only capture availability at specific points in time.
• Automated measurement leveraging EPoS (Electronic Point of Sale) data allows real-time visibility and deeper analytics into root causes of OSA issues.
• The shift enables retailers and CPGs to analyze OSA trends continuously, providing a more accurate and holistic view of stock availability.

3. Leveraging Data for Better OSA Management

• EPoS data is a game-changer for OSA measurement, helping track out-of-stock patterns across multiple stores, categories, and SKUs.
• Challenges in data sharing: Some retailers are resistant to sharing data due to privacy concerns or competitive sensitivities. The availability of inventory data is still limited, making it harder to track real-time stock movement. The CPG presenter reported less than 50% availability by retailers of EPoS data, showing the need for further collaboration.
• Latin America leads in data sharing, particularly in Brazil, where regional retailers are more open to collaboration with CPGs.

4. Regional Differences and Best Practices

• Brazil’s success story: With over 300 retail customers and a fragmented market, this CPG's operation in Brazil successfully negotiated joint business plans (JBPs) to improve OSA.
• Colombia’s collaborative model: The Logyca initiative has created a non-profit industry-wide collaboration between CPGs and retailers, leading to: A shared goal to reduce out-of-stock by 3% by 2027. Joint root cause analysis and structured action plans. Monthly benchmarking reports, enabling retailers and suppliers to compare performance.

5. Key Questions for Retailers and CPGs

For CPGs:

• Do you build dedicated OSA teams? Identifying "OSA Champions" within organizations can drive strategies forward.
• How do you leverage AI and automation? Advanced algorithms can help predict out-of-stocks before they occur.
• How can you strengthen cross-functional collaboration? OSA is not just a supply chain issue—it involves customer teams, sales, execution, and data analytics.
• Does it make sense to prioritise key stores and SKUs? 20-25% of stores typically drive 65-70% of OSA issues—focusing on these can yield significant improvements.
• How do you incentivise field teams? Implement training and rewards for sales and merchandising teams to ensure they focus on improving OSA metrics.

For Retailers:

• Should our business enhance data-sharing partnerships with CPGs?: Retailers benefit when suppliers have access to better OSA insights.
• Should we consider AI and IoT solutions? Emerging technologies like electronic shelf labels, shelf cameras, and predictive analytics can further improve OSA.
• How do we align promotions with supply capabilities? Promotional events often trigger OSA failures, so better forecasting and planning with CPGs are crucial.
• How can we invest more in store associate training? Ensuring store associates are well-equipped to manage replenishment and track inventory accurately.

6. The Future of OSA – Moving from Good to Great

• The next frontier in OSA management includes: AI-powered forecasting models (e.g., Colombia’s Logica pilot using algorithms to enhance demand planning). Improved collaboration models—learning from Latin America's success in joint industry efforts. Better use of automation to integrate multiple data sources (e.g., warehouse, store-level inventory, and real-time shelf insights).

Final Thoughts

Retailers and CPGs could being to treat OSA as a joint responsibility and.....

• Invest in data-driven solutions for real-time tracking.
• Collaborate strategically to improve shelf execution.
• Integrate AI and predictive analytics into their planning processes.
• Adapt best practices from high-performing regions (e.g., Latin America’s success in data-sharing).

Ultimately, improved OSA benefits both retailers (higher sales) and CPGs (better brand visibility and loyalty), should make it a win-win strategy for the industry.