When I had the privilege of meeting the late Dr. Eli Goldratt, he demonstrated his knack for simplifying complex problems with humor. During our conversation, he quipped about the relative challenges of supply chain management versus marketing:
“Supply chain management? Easy! It’s like shooting sitting ducks. Marketing people, they’ve got the hard part—they have to get the ducks to sit.”
It was a lighthearted moment, but the underlying truth still resonates: while supply chain management focuses on ensuring goods are available, marketing’s challenge is to create the demand that justifies their availability. In reality, the two functions are highly interdependent—and when they work in harmony, the result is seamless sales and satisfied customers.
Kidding Aside: A Relationship of Dependency
The relationship between marketing and supply chain isn’t just a partnership—it’s a dependency. Marketing drives demand through campaigns, branding, and consumer engagement, while the supply chain ensures the goods are available to fulfill that demand. But this dependency can sometimes feel like a conflict, especially when marketing tactics like scarcity are used to create urgency and exclusivity.
Take the idea that scarcity drives demand. Does that mean stock-outs—a literal scarcity—are good for business? Absolutely not. From a supply chain point of view, stock-outs are a failure: they represent missed sales, disappointed customers, and inefficiency. For marketing, stock-outs can damage the trust and loyalty that campaigns work so hard to build.
Resolving the Tension: Enter NOOS
This apparent conflict between marketing and supply chain disappears when we focus on NOOS (Never Out of Stock) items. These are the staples—products with long shelf lives and steady demand—that everyone agrees should always be available. Moreover, NOOS items typically contribute significantly more to sales than they do to inventory within the assortment. This makes stock-outs for NOOS items relatively more expensive than for fashion or seasonal items with shorter shelf lives, where demand is often less predictable and markdown strategies are common.
Imagine a customer walking into a store for a NOOS product, like their favorite brand of toothpaste, and finding the shelf empty. What happens? More often than not, the customer will grab a competitor’s product, and you’ve lost both the sale and, potentially, the loyalty. Research shows that:
- 31% of customers leave without making a purchase when faced with a stock-out, and
- 43% will substitute a competitor’s product if their preferred brand isn’t available.
NOOS items highlight the shared goal of marketing and supply chain: ensuring these essential products are always on the shelf to keep customers happy and revenue flowing.
Why Stock-outs Aren’t an Option for NOOS
Stock-outs are costly. For customers, they’re frustrating. For retailers, they’re expensive—not just in lost sales but in operational inefficiencies like emergency replenishments. For marketers, they undermine trust and erode the brand’s value proposition.
NOOS products—like toothpaste, batteries, or basic apparel—are expected to always be available. Their absence sends a message of unreliability that hurts both the retailer and the brand. This is why these products are such a great starting point for resolving the tension between marketing and the supply chain.
How NOOS Items Align Marketing and Supply Chain
NOOS products showcase how marketing and supply chain are natural allies:
- Predictable Demand: Unlike seasonal or trendy products, NOOS items have consistent, steady demand. This makes forecasting and planning easier for the supply chain.
- Mutual Dependence: Marketing relies on the supply chain to ensure products are available to capitalize on demand, while the supply chain depends on marketing to maintain a steady flow of customers.
- Clear Expectations: Everyone agrees that NOOS items should always be in stock. There’s no room for debate—availability is the goal.
This alignment creates a win-win situation: customers get what they want, retailers optimize inventory, and brands maintain their reputation for reliability.
Looking Ahead: The Never Out of Stock Strategy
NOOS products demonstrate the power of alignment between marketing and supply chain. But achieving this requires more than agreement—it demands a responsive supply chain that can anticipate demand, adjust to fluctuations, and ensure availability without overstocking.
In the next blog post, we’ll explore the foundational principles of a responsive supply chain: the rules, the metrics and the technology. These are the cornerstones of ensuring that NOOS items—and everything else—are always available when customers need them.
Key Takeaways:
- Marketing and supply chain are interdependent, not adversarial.
- Stock-outs are a failure for everyone—marketing, supply chain, and the customer.
- NOOS items highlight the shared goal of ensuring availability to keep customers satisfied and revenue steady.
- Responsiveness is the key to bridging the gap between demand generation and fulfillment.