Reg.

No: R3-SLM-TD022
Date: 29-05-2012

Task description:
Review local-local shortage
1 Overview
“Review Local-local shortage” is part of sales location management working method - Monitor. This document will
support you to:
 Understand Local-local shortages and why the should be reviewed
 Understand the steps to perform the task
 Understand of the roles and contributions to this task

2 Reasons to start
This task is done to check how much Local-local shortages effect
 Perceived availability for the customer
 filling rate and visual fill levels
 availability
 efficiency levels

3 The expected result

Potential areas of improvement to avoid Local-local shortages are identified and actions are decided upon by the
goods flow manager together with the shop commercial team.

4 ARC Model:
Task Accountable: In-store Logistics Manager
Task Responsible: Goods Flow Manager
Task Contributor: Shopkeeper, Sales & Supply Support Manager, Sales/Logistics co-workers

Basic Responsibilities for the task:

In this task the goods flow manager identifies, if actions are necessary in order to prevent Local-local shortages
and to discuss them with the shopkeeper.

Basic Contributions to the task:

Shopkeeper:
- Identifies articles which frequently have Local-local shortages during the day.
Sales & Supply Support Managerr:
- Identifies articles which should be inventoried (including how often).
Sales/Logistics co-workers:
- Identifies articles on the shop floor which are missing (inventory differences).

5 Monitoring commercial sales locations: Analyse fill level and identify actions
Identify Actions After securing sales spaces
Identify potential Review Review are accurate availability is
improvements through – Review
replenishment replenishment monitored to secure short
flexibility levels
Understanding the point parameters term actions do not drive
customer perception of tactical plans. Internal
‘full’ and measuring the replenishment is checked
real filling rate. Review before flexible sales spaces
Review staff Review local
flexibility
distribution local shortage and commercial quantities
opportunities are investigated.
Shopkeeper and/or goods
Analyze Fill Level flow manager assess
Review daily
parameter opportunities on
Check visual fill Check filling Review sales
maintenance
Review out of individual product level for
level rate space stock
routines flexibility and
replenishment.

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 Review Local-local shortage
Reg. No: R3-SLM-TD022

5.1 Definitions
A detailed understanding of Local-local shortages is needed before starting this task. See the IKEA Concept
“Service Level and Shortage Concepts” [1].
Local-local shortage
Local-local shortage means that goods are in the store, but not available to the customer (in the sales location)
during store operating hours.
In order to secure a high level of commerciality and secure availability to the customer, local-local shortages
should be prevented by the goods flow manager and supported by the shopkeeper and sales/logistics co-workers.

It is important not to confuse the local-local alerts in the SLM tool with the KPI “local-local shortages”. These are not
measured at the same frequency. These differences are also acceptable, because each serves a different purpose:

 The SLM tool is used to optimize the planning process of sales location management
 KPIs give an indication how well a store is operating and in which areas improvement may be needed

5.2 Visibility of local-local shortages

Local-local shortages are updated in the store opening batch in the sales location management tool. Therefore, it
is possible for the goods flow manager to solve most issues that occur before the store opens.

The shopkeeper is alerted by the sales location management tool regarding articles that have local-local shortages.
This means he/she can check sales space sizes or discuss with the goods flow manager which alternative actions
can be taken. Additionally, Local-local shortages are visible in the GADD list “SL-040”.

5.3 Causes of Local-local shortage

Local-local shortages happen due to one or more of the following:
 Sales location sizes are too small to cover the demand for an entire day
 Inventory differences
 Replenishment not finished before store opening
 Replenishment parameters (replenishment point – including the IRL)

Sales Location Sizes

The minimum sales space size is defined in such a way to prevent Local-local shortages. Since it is the minimum
sales space size, there is still a risk that the article could have Local-local shortages on occasion (unexpected peak
in selling). If these problems occur regularly, see the following task descriptions:
 Assess density [2]
 Review sales space [3]
 Review efficiency base [4]
 Review replenishment point [7]

Inventory differences
If the physical amount of stock does not match the amount in the system, the system cannot work properly. See
the IKEA Concept “How to reduce inventory differences” [5].

Replenishment not finished before store opening

Due to fluctuations in the number of in-deliveries and personnel, it may happen that the replenishment is not
finished in all areas of the store before store opening. If this happens repeatedly in certain areas of the store, it
may be necessary to re-distribute replenishment personnel or optimize sales spaces in those areas. See the
following task descriptions:
 Assess Density [2]
 Review sales space [3]
 Review staff distribution issues [6]

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 Review Local-local shortage
Reg. No: R3-SLM-TD022

6 Appendix
6.1 Terminology:
Definitions can be found in IKEA Words & Terms.
http://online.inter-ikea.com/wordsandterms/Pages/default.aspx

6.2 References:
The following documents support or elaborate on the task step definition described above:
[1] IKEA Concept: “Service Level and Shortages”
http://toolbox.inter-ikea.com/sites/IKEAConcept/Articles/Pages/
HTDIMainSection259.aspx?NodeId=c9695e0e-1bdc-467f-96e1-4879dc776205
[2] Task Description (TD-029): “Check maximum density”
[3] Task Description (TD-014): “Review sales space”
[4] Task Description (TD-004): “Review efficiency base”
[5] IKEA Concept “How to reduce inventory differences”
http://toolbox.inter-ikea.com/sites/IKEAConcept/Ideas/Pages/How
%20to%20reduce%20inventory%20deviations.aspx
[6] Task: “Review staff distribution“
[7] Task Description (TD-025): “Review replenishment point”

6.3 Revision History:

Edition Date Revision details Author

1.1 15 Mar 2011 Initial draft Aaron Bialke

1.2 01 Jun 2012 Final draft Aaron Bialke

2.0 29 Mar 2012 Highlighted the difference between alerts and

Aaron Bialke
KPI

2.1 29 May 2012 Changed update frequency for local-local alerts Aaron Bialke

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