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TERM
Leakage Tree
Visual breakdown of lost sales across causes.
Definition
A leakage tree maps where potential sales are lost, such as out-of-stocks, voids, or low compliance.
How to Calculate
Identify total opportunity, subtract actual sales, and allocate gaps by root cause.
Why it Matters
Helps pinpoint operational issues and recover lost revenue.
Key Advantages
Provides a structured view of losses, supports corrective actions, and improves accountability.
Example
$10,000 lost: $4,000 from voids, $3,000 from out-of-stocks, $3,000 from poor display compliance.
Use it to
Break leakage into components such as voids, cannibalization, and switching to locate root causes. Target the largest contributors with specific corrective actions.
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