What is a stockout?

A stockout is the moment the shelf goes empty while someone still wants the item. The direct costs are easy to picture: the lost sale, the customer who buys from a competitor, the technician driving back from a jobsite because the truck didn't have the fitting. The indirect costs compound: expedited freight to recover, substitutions that erode margin, and the customer who quietly stops checking whether you have it. Every stockout has a traceable cause, and they cluster into a few patterns. The reorder point was never set or was set too low. The supplier's lead time stretched and nobody updated the math. The record was wrong, so the system believed stock existed while the shelf was bare. Or demand spiked beyond what safety stock covered. Each cause has a different fix, which is why logging the cause matters more than logging the event. Where teams trip: measuring nothing. A stockout that nobody records looks free. Track stockout events per SKU along with what each one cost (lost order value, expedite fees, repeat-visit labor), and the case for better reorder points writes itself. The goal is not zero stockouts everywhere, which would mean overstocking the long tail; it's zero stockouts on the items where the miss is expensive.