Collaborative model to reduce stock breaks in the peruvian retail sector by applying the s&op methodology

Abstract

The retail sector is a growing industry, however with serious problems associated with inventories such as stock breakage. This article proposes a collaborative model applying the S&OP methodology to reduce stock breakages in a Peruvian company in the retail sector through a purchasing plan designed by the interaction and participation of different actors in charge of the process. The results of the model are measured by the percentage of stock breaks, the demand forecast error and the increase in sales. In the diagnosis of the problem two factors were identified that cause the stock breaks. The first is caused by the delay that exists in the replenishment of inventories, due to the bad programming of delivery of products between the distribution center and the stores. The second is related to the insufficient amount of purchases caused by not properly categorizing the products, poor forecast and not having safety inventory policies. A simulation resulted in a 17% stock breakage reduction, a 17% forecast error decrease, and a 15% sales increase.