Value-attenuation in distribution networks : Insights from a service dominant-logic perspective on retail out-of-stocks

This conceptual article examines the effects of out- of-stock items through the Service-Dominant (S-D) logic lens. Combining classic S-D logic research with recent applications of S-D logic in supply chains, this article examines the role that out-of-stock items play in value attenuation throughout the supply chain and its networks of actors. It presents a model of value co-creation where the brand manufacturer and customer demand meet in the retailer's realm for the "first moment of truth," and then develops a model of the total costs of a stock-out that are uncovered by the S-D logic perspective. It concludes with managerial implications showing how this perspective can bring previously misaligned incentives of supply chain actors into alignment.