From the back door to the floor

Suppliers built their entire operating model around getting products to the distribution center - then stopped owning the outcome. A 40-year P&G veteran reveals that 75% of OSA failures happen upstream, not on shelves, and why the old "responsibility ends at the DC" mindset is leading to lost sales.

For years, most conversations about on-shelf availability started and ended at the same place: the distribution center. Did our truck arrive on time, and in full? Did we hit the agreed service level? If the answer was yes, responsibility was considered fulfilled. What happened next, whether the product actually sold, was someone else’s problem.

That logic shaped how suppliers built their organizations, forecasts, incentives, and systems. But it breaks down completely in today’s frictionless economy, where shoppers expect to find exactly what they want, when they want it, whether they’re standing in a store aisle or tapping “buy now” on a screen.

That tension between OSA responsibility and accountability was at the center of a conversation on the SCMRC LEAD Podcast, where Mike Graen sat down with Pete Silvestri, recently retired after a 40-year career at Procter & Gamble, to reflect on how OSA has evolved and why many suppliers are still solving the wrong problem.

As Pete put it simply, “If it’s not available for a shopper or a picker, it’s not available. You can’t sell it.” The statement sounds obvious. Living up to it is not.

If you have not listened to the full conversation yet, it is worth your time. You can find the episode below:

CPG Supplier Implications with Pete Silvestri

Podcast Episode · Supply Chain LEAD Podcast · 05/18/2022 · 42m

podcasts.apple.com/us/podcast/supply-chain-lead-podcast/id1495371611?i=1000563531651

After years of analysis, Pete and his teams discovered that the majority of OSA issues, roughly 75 to 80 percent, do not originate in the store. They stem from forecasting errors driven by inaccurate on-hand data, and from system issues where inventory exists but its precise location is unclear.

That insight forces a fundamental rethink. If most OSA problems do not start on the shelf, then sending people to blindly walk stores was never the answer. The real work begins earlier, upstream, with how inventory is planned, positioned, and tracked.

This is where the mindset shift becomes unavoidable. For decades, suppliers optimized to the back door of the distribution center. Once the product arrived, responsibility ended. Pete argues that boundary no longer exists. Suppliers must now own the outcome, not just the shipment. Responsibility extends all the way to the floor.

Owning OSA in this environment means knowing, by item, how much inventory exists, exactly where it is, and whether it is truly available to sell. Not eventually. Not theoretically. Now. When forecasts assume inventory will flow perfectly and it does not, the consequences ripple backward. Manufacturing backs up. Materials misalign. Inventory accumulates in the wrong places. Lost sales occur silently, never fully captured in reports.

One question inevitably arises: is this not the retailer’s job?

Historically, suppliers threw inventory over the wall and trusted retailers to handle the rest. That model is no longer sufficient. Pete describes today’s reality as back to the future. Before self-serve retail, shoppers handed a list to a shopkeeper who picked the items for them. Today, the app is the list, and the picker is the shopkeeper. If a product cannot be picked, it cannot be sold.

Owning OSA is not about doing the retailer’s job. It is about protecting demand. It is about recognizing that in a frictionless economy, the final point of availability is where value is created, or lost.

As Pete reflected on his career and the road ahead for the industry, he left two simple but powerful imperatives. First, obsess over the shopper experience. OSA is not just a supply chain metric; it is a shopper trust metric. Second, make inventory accuracy crystal clear - not somewhere in the network, but exactly where it lives by item and location. And third, fully commit to the consumption economy. If products aren’t reliably available online, the business isn’t truly participating in today’s market.

The lesson is straightforward. If the product isn’t on the floor, you can’t sell it. And if responsibility still ends at the back door of the DC, the gap between what is shipped and what shoppers buy will only continue to grow.

2026 will belong to suppliers who own the full OSA journey - from back door to the floor.