Supply Chain Blog

Supply Chain Analytics: Sprouts, Imodium & Harry Potter

Posted by Dave Jordan on Wed, Jan 18, 2017

Christmas and new year holidays seem a long way behind. The decorations have been squeezed back into their boxes for another year and Slade, Cliff, Bing, Bowie and others are safely back in their CD cases. Turkeys around the world are rejoicing as much as the children who do not have to tackle Brussels Spouts for another 12 months.

 

As ever, platform 9 at London’s Kings Cross station is a lonely place jam-packed full of people. Fellow commuters all with the same futile hope of securing a double seat with a table and a charging point nearby. A seat of any kind would be a bonus on your daily commute out of London to Cambridge on the 07.44 but at least this train will run and is on time. This must be the only form of transport globally where you can pay a premium seat price to stand next to a blocked toilet. Enjoy!

 

Blue Monday, even the odorous toilet spot has been taken so you are further relegated to the unheated bicycle area which must have been designed for Eskimos with unicycles. Settled as well as it is going to get, your thoughts turn to the new year ahead and the depressing expectation of the same old operational problems and challenges popping up. The slow chug-chug of the train brings the first lines of Bohemian Rhapsody to mind as an apt description of how you feel:

 

Is this the real life?SUPPLY_CHAIN_ANALYTICS_IT_FMCG.jpg
Is this just fantasy?
Caught in a landslide,
No escape from reality.

 

This sneaks into your head repeatedly even as the chugging slows and Cambridge eases into view. Time to snap out of it and get the business hat firmly on. At least the new ERP is in place and after a 3-month error-ridden ramp-up it should be ready to support the business a little better than the in-house, low cost, back of a fag packet version that lasted more than 10 years. There is a lot riding on this expensive ERP; this ERP will finally tell us what is really happening in our supply chain.

 

Well no, it will not.

 

Don’t worry, you have not invested heavily in the wrong software. The ERP will do exactly what is says on the tin which is probably in the German language.

 

Thinking back to that train toilet, consider for a moment that your ERP is Imodium – a fantastic product which does exactly what it claims on the pack. You can trust Imodium to get you from A to B where B is not necessarily where you want to be but it is a place of distinct safety and comfort. Imodium does not tell you what went wrong inside nor does it tell you what to do differently to avoid the same effect at a later date. In short, Imodium slows down your business but doesn’t tell you what is wrong.

 

What you need is some form of Supply Chain Analytics to sit on top of your ERP/Imodium – not a substitute. Your new ERP will have automated your usual ways of working but this seldom leads to huge improvement and often, performance visibly worsens with the increased noise and operator nervousness in the planning processes. Inevitably, the forecast takes the blame. The issues lie within the supply chain processes, the set-up of the IT systems and how add-on tools are being used. To protect themselves, your supply chain managers are buffering supply chains with unnecessary inventory and backside-protecting lead-times.

 

Analytics uses your data to analyse and diagnose what is happening in your supply chain by providing a suite of tools and dashboards to model the implications of your decision making. Achieving extra visibility across the supply chain inevitably delivers better service, lower costs, happier people and a supply chain that is easier to manage.

Analytics is transforming the way organisations improve performance and gain competitive advantage, every day. Even on those cold, wet Mondays when you are at the station contemplating another standing commute. Take a look at Supply Chain Analytics and you will find yourself with exclusive access to Kings Cross Platform 9¾ and we all know what magic is possible there!

Image courtesy of Poulsen Photo at freedigitalphotos.net

Tags: FMCG, Dave Jordan, CEO, Humour, Supply Chain, Supply Chain Analytics, IT

FMCG Planning: If you like chocolate, now is the time!

Posted by Dave Jordan on Wed, Jan 11, 2017

Overeaten chocolate during the holidays but still want some more? Get yourself and a large blue IKEA bag down to your local supermarket as chocolate is heavily discounted. Easter is not far away this year so why not save a little cash and stock up now - use by dates permitting, of course!

Post Christmas I have been taking a look at International Key Account retailers and seeing how they are coping in the continuing economic squeeze. One question came to mind after seeing well over 20 outlets of various retailers. What do they all do with all that chocolate and other Christmasy confectionery?

Planning Chocolate Sale The same scenario is also present after Easter. Shelf after shelf and gondola after gondola of seasonal chocolate in all sorts of formats, shapes and sizes. Not simple packaging either and it must cost a fortune to pack a 15cm tall chocolate Santa or rabbit into a multi-coloured coffret. To be fair it is not just one manufacturer who has suffered a forecasting blip, every major name chocolate producer appears unable to get it right. For all of them Christmas must be a peak period and one that can make or break the year-end results and with no time left to remedy any sales deficit. Similarly, the timing can also place an un-provisioned hole in Q1 numbers even before you have taken down the decorations.

Of course, nobody wants to disappoint consumers and run out of stock at those peak periods but how can they afford the apparent over-stocking? If the goods are on consignment or “sale or return" then I can perhaps understand why retailers let displays hang around for several weeks. Even then I doubt the retailers would relish wasting valuable sales space on Easter themed chocolate into June and beyond.

Considering the power retailers have over producers I do not understand why stock is allowed to gather dust on shelves. Certainly, for many foodstuffs the listing contracts will contain clauses to withdraw stocks but usually only when the sell-by date approaches or off-take is ridiculously low.

What is the destiny of chocolate Santas and bunny rabbits after the sell-by date arrives? You cannot do much with it, can you? You cannot send it to a sink market in another country and with the vast majority of edibles you cannot recycle the stuff into fresh production as you could with washing powder, for example. If you have to write-off stock you have to pay to have it destroyed professionally and you frequently have to pay VAT on the stock value as if it was a sale.

Whatever the destiny of all that yummy chocolatey goodness, it is indicative of a lack of rigour in forecasting and/or sales expectations. Diverting some investment from stock that does not sell into taking a long, hard look at your Sales & Operational Planning (S&OP) process could offer a very rapid pay-back for those companies willing to break the chocolate losses mould.

As a step further, Supply Chain Analytics can help you to fully understand what is really happening in your peak periods and why you continue to miss your sales targets. Presently, there is a free of charge offer to analyse some of your data and expose the reality of your decision making.

Image courtesy of Nora Ashbee at Enchange.com 

 

 

Tags: FMCG, Christmas, Dave Jordan, Supply Chain, S&OP, Forecasting & Demand Planning, Supply Chain Analytics

An FMCG Distributor Is For Life: Not Just For Christmas

Posted by Dave Jordan on Wed, Dec 21, 2016

Ok, so you are unlikley to see this on a car bumper sticker but FMCG Distributors will have a significant impact on your sales performance, probably your variable pay bonus and therefore your CEO aspirations! How have you treated your Distributors this year? Were they the usual pain in the proverbial - failing to achieve targets, not paying on time, always moaning about trading terms? Of course, some Distributors do fit this stereotype but others are keenly trying to be treated as and to be, equal partners in your business success. But do you see this?

How are things going in Q4? Have you fallen into the trap of the “sales bonus push”? Year end stock clearance FMCG Breaking all the supply and sales phasing rules you have been trying to drum into Distributors? Did you strictly maintain discipline on Sales & Operational Planning or did the last quarter deteriorate into a “sell whatever we've got in the warehouse” scenario?

Companies that spend time and effort in proactively guiding their Distributors, providing relevant training and support inevitably succeed in the market place. Yes, at the end of the day Distributors have to stand on their own two feet but so many FMCG companies assume an organisation calling itself an “FMCG Distributor” inherently knows how to properly support any specific business.

If you do not pay attention to the Traditional Trade (TT) distribution side of your business then you are asking for trouble and that trouble usually ends in divorce along with all the discontinuity baggage separation brings. You need to avoid your choice of Distributors becoming like the English Premier League where managers get about 5 minutes to make an impact before being shown the door. (Strange though, that all these football managerial failures usually find another highly paid role.)

So, as we approach a special time of the year why not think about your Distributors and ask yourself if you have given them a fair crack of the whip?  If not, then you might consider a New Year resolution to develop a strategy for mutual success. This is far better than continually highlighting deficiencies and using backward looking, discipline focussed KPIs to bash them on the head.

Sit down with your RTM Distributors regularly, evaluate their strengths and weaknesses and agree to do something about the latter. Simply running through a Route To Market evaluation together can work wonders in establishing trust and cooperation. Do yourself a favour and do this now before Q1 next year also becomes history.

Click on the RTM link below and go!

CTA RTM Free Download resized 600

Image courtesy of stock.xchnge at freeimages.com

Tags: FMCG, Route to Market, Dave Jordan, CEO, Performance Improvement, Supply Chain, S&OP, Distribution

FMCG CEO 2016 Letter to Santa Claus (aka Father Christmas)

Posted by Dave Jordan on Tue, Dec 20, 2016

FMCG/Brewing/Pharma CEO Letter to Santa ClausDear Santa,

I have been a very good FMCG CEO this year, I promise. If you want, you can check with my shareholders. They know how good I have been this year. Apart from the out of stocks of course, oh and the little mistake when we had to write stock off and waste lots of our money. But that is not so bad is it? Other CEOs were naughty last year and they still got what they wanted from you.

I had better be honest because you will know if I am not telling the truth. We also had a problem starting S&OP and so our planning, forecast accuracy and sales were not very good. They were not really big problems so I hope you can forget about them this time, please. Next year I promise to do better, I do, honest.

I forgot about the Route To Market (RTM) mess we had in the peak sales months but that really was not my fault. I also promise to do something about RTM next year and make sure it works properly so people who buy our products are not disappointed again. I know it is bad when people come to buy our products and then spend their money on something else. I will talk to our distributors and Enchange and find out what we need to do.

I know, I know, when the new ERP computer system was switched on we were not really ready for the change but we did make it better as fast as possible. I did not think we needed any outside help for the new IT but I admit I was wrong. Next time I will get it right, hopefully without having any lost sales.

The factory thing was not my fault, I think. The factory man promised me lots of product but his machines kept breaking down at the wrong times and we had to wait for the fixing men to arrive. They took ages to get the machines working again and then they broke down again and again. No, it is not a very reliable factory, yet.

Does the warehouse problem count against me as well? We could not find our products when we wanted them and then when we did find them they were old and out of date and of no use. This was very sad but it will not happen again next year, I hope.

I have just read my message again to make sure I did not spell any words wrong and I see I was not as good as I thought. Actually, after reading this I am going to the chimney to take my stocking down and put it away in the Christmas storage box. I will try again next year, Santa.

Bye bye and Happy Christmas.

CEO FMCG

Image credit: HikingArtist.com

Tags: Route to Market, Christmas, Logistics Service Provider, Dave Jordan, CEO, Humour, Performance Improvement, Traditional Trade, S&OP, Sales, Inventory Management & Stock Control

The Twelve Days of Supply Chain 2016

Posted by Dave Jordan on Mon, Dec 19, 2016

On the first day of Christmas, 12 days of SC Xmas  Small2 copy resized 600
Enchange gave to me 
A robust S&OP. 

On the second day of Christmas, 
Enchange gave to me 
Two fine consultants, 
And a robust S&OP.

On the third day of Christmas, 
Enchange gave to me 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the fourth day of Christmas, 
Enchange gave to me 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the fifth day of Christmas, 
Enchange gave to me 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the sixth day of Christmas, 
Enchange gave to me 
A suite of KPI’s 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the seventh day of Christmas, 
Enchange gave to me 
SupplyVue Analytics
A suite of KPI’s,
Better bottom line, 
Streamlined logistics, 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the eighth day of Christmas, 
Enchange gave to me 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the ninth day of Christmas, 
Enchange gave to me 
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the tenth day of Christmas, 
Enchange gave to me 
Great Customer Service,
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s 
Better bottom line, 
Streamlined logistics 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the eleventh day of Christmas, 
Enchange gave to me 
Integrated Supply Chain, 
Great Customer Service, 
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the twelfth day of Christmas,                                                                          Enchange gave to me
APO Implementation
Integrated Supply Chain, 
Great Customer Service, 
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

Have you got your breath back? Finally, we wish you a very Merry Christmas and an increasinly prosperous New Year!

Image courtesy of Nora Ashbee at Enchange.com

Other seasonal posts:

Tags: Christmas, Dave Jordan, CEO, Humour, Performance Improvement, Supply Chain, S&OP, Forecasting & Demand Planning

FMCG CEO Christmas Gift: Implement S&OP – Slade style!

Posted by Dave Jordan on Fri, Dec 16, 2016

Christmas is coming around faster than ever and who better than Noddy Holder and Slade to give a Sales & Operational Planning (S&OP) process to your business as a present. This song has been heard at Christmas every year since 1973! If you have been living in a cave on a remote island and don't know the tune you can click here for the original, boring non-S&OP version.

1 2 3 4.......

Are you looking at your sales chart on the wall? Sales and Operational Planning
Is it the time you have to stop the fall?
You’ve tried overpaying salesmen,
You’ve loaded up the trade
Do you need to find a better way?

Chorus:
So here it is S&OP
Everybody should run one
Look to the future; how?
Six months or even one.

Are you guessing how much you’re going to sell?
Are you suffering high out of stock as well?
Does supply chain always tell you, pre-SOP is best?
So why not work together for a test?

Chorus:
So here it is S&OP
Everybody should run one
Look to the future; how?
Six months or even one.

What will the salesmen do
When they see their targets being met?
Ah ah
They’ll be changing the chart gradient on the wall.
Not for them will sales fall and fall.
When you implement S&OP you make quite a change
Looking back the old way will feel so strange.

Chorus:
So here it is S&OP
Everybody should run one
Look to the future ;  how?
Six months or even one.

Noddy knows best so why not find out about S&OP now and give your business the perfect Christmas gift.

Image courtesy of Nora Ashbee at Enchange.com

 

Tags: FMCG, Christmas, Dave Jordan, CEO, Humour, S&OP, Forecasting & Demand Planning

Santa & Opening Presents - S&OP Putting Elves in their place

Posted by Dave Jordan on Wed, Dec 14, 2016

Dear Mr. K Ite,

Thank you for your very short note highlighting some minor points; I can see you are a little aggrieved. On behalf of "Mr Claus I will attempt to minimise your apparent unease with the S&OP process in the context of the very small print in your members employment conditions.

I think we have to manage expectations here. I know your members play an important role in the Christmas S&OP but as far as I am aware there are very few (if any) Christmas songs about Elves. Let me see now:

Dashing through the snow in a one elf open sleigh….I think not!

Good King Elf looked out of the feast of Stephen…..no, not there either.

Rudolf the red nosed elf….not quite eh?

You do not even get a mention in the all encompassing 12 Days of Christmas!!!

Your members are lucky to have assured contracts which guarantee employment every year without fail. Unless the world runs out of children I think we can safely see continued employment into the future. The green hats were part of the 2009 collective bargaining agreement where we agreed to new hats every 5 years instead of the industry standard of every 10 years. You will recall we reversed out decision to change colour of the hats to pink at the same time.

Santa and S&OP Planning Cylcle

The employment market is currently very tough and I urge you to communicate to your members the difficulties you will cause should you withdraw your labour. We are unable to pay you for doing nothing for 46 weeks of the year and I am sure you would agree with this. Frankly, if this is what you and you members expect then I suggest you apply to join the Marketing Department.

Finally, I address your comment on S&OP specifically. In our industry planning is everything to ensure we keep the children happy AND do not enter January with excess stock nobody wants. If you want to see what can happen when you get the planning wrong in our kind of business please check out Vuvuzelas and the Value of S&OP.

I am sure you will communicate our position to your members.

With chilly regards,

Mr. I Cicle

 

Tags: Christmas, Dave Jordan, Supply Chain, S&OP, Forecasting & Demand Planning

Santa & Opening Presents, S&OP & the Elves Respond

Posted by Michael Thompson on Mon, Dec 12, 2016

Dear Mr Santa,

I refer to the recent blog article, "Santa & Opening Presents; Why S&OP is Invaluable at Christmas".

As I mentioned in the consultation process just prior to S&OP implementation, I was prepared on behalf of our members to support the programme, provided and only provided it did not affect our rights as elves.

IncideAngryElfntally, I see that I am not alone in considering that S&OP is not really needed & refer you to Mike Thompson’s excellent series of blogs starting with “What has S&OP ever done for us”.

We were prepared to concede certain rights under the Working Time Directive but now things have gone too far. In particular I would like to draw your attention to our most serious grievances – there are more:
  1. Elves unemployed.  We cannot and will not accept that lack of work is a reason for redundancy.
  2. Season Bonus.  Pah.  When has a new green hat ever been proper recompense for 16 hour working days and such appalling shift patterns?  And let’s not forget that we only received the hats because of overstocking due to a poor sales forecast (see other S&OP blog).

Unless our legitimate grievances are dealt with immediately, you will leave us with no choice other than to consider industrial action.

In the meantime, and to demonstrate just how seriously we consider the current situation to be, we are no longer prepared to sing the Company Song.  “Yo Ho Ho” is old hat (excuse the pun). 

I look forward to your reply.

Yours sincerely,

Fred K. Ite

Shop Steward & Chief Elf

 

Tags: Christmas, Michael Thompson, S&OP, Forecasting & Demand Planning

Santa & Opening Presents - S&OP is Invaluable at Christmas

Posted by Dave Jordan on Fri, Dec 09, 2016

“Dashing through the snow
In a one horse open sleigh…”

How many of you started to sing then? Yes, the festive period is fast approaching and the biggest and best Supply Chain in the world is almost ready to activate. This is always the most efficient Supply Chain whatever Gartner may say.

There is no way Santa Claus could achieve his annual success without sticking rigidly to an S&OP process, i.e. Santa & Opening Presents.

The process starts every year on the 26th December just as children start to play with the empty packaging instead of their much sought after gifts. Their engorged parents lounge sleepily in front of the television watching The Great Escape or Jason & the Argonauts – again! The loyal Elves are given their end of season bonus and packed off back to Eleveden Forest in Suffolk. Didn’t you know that is where they live for most of the year?

Before January is over those lovely people who design toys and games quickly introduce new and more exiting models which will become must-haves for countless girls and boys. Toy shops are visited and millions of children quietly note those presents they would like Santa to bring them this year. The demand slowly builds until it is time to bring the Elves back from Suffolk on the eleventh day of the eleventh month – no coincidence there! The first job for the Elves is to get the huge Christmas factory ready to run once again.

santas_sop_planning_cycle_small.jpg

In parallel with this, millions of children around the world unzip their pencil cases with a purpose. Using their best handwriting they tell Santa they have all been well behaved this year and then  list all the presents they would like to receive. This accumulated demand allows the Elf factory to start making production plans to meet a deadline that is set in stone. Is there a peakier peak period?

Money does not grow on trees so “Santa” must quickly check what can be afforded from the budget. Remember, the wish lists are always too long and you do not want 100% Customer Service  – keep “em hungry”, I say. The Pre-S&OP takes place with all stakeholders involved to ensure everything is ready to go. You want to avoid stock-outs just as much as you need to avoid expensive write-offs.

After necessary adjustments are made to the planned volumes by SKU the final S&OP takes place. Bearded Santa is fully dressed in his best red uniform and takes his seat. If Pre-S&OP actions have not been carried out, then there is unlikely to be much “Yo Ho Ho-ing”. Fortunately, everyone is in agreement and the final set of child and associated gift numbers is rubber-stamped. Everyone involved in the Christmas S&OP must operate on the same set of numbers or somebody will be disappointed.

The big day comes and Rudolph leads the reindeers in pulling the delivery sleigh across the world in a complex logistical challenge. Santa makes sure all the presents are delivered on time before little heads lift from pillows to wake parents at 4am! (Well, I did.)

 “Dashing through the snow
In a one horse open sleigh
O'er the fields we go
Laughing all the way
Bells on bob tails ring
Making spirits bright
What fun it is to laugh and sing
A sleighing song tonight”

Before you know it, there we are again on 26th December and the same robust and reliable S&OP cycle starts once more. See you next year Sant

Image courtesy of Enchange Ltd at Enchange.com

 

 

 

 

 

Tags: Christmas, Humour, Supply Chain, S&OP, Logistics Management

Case Study: FMCG (Friendly Man Carrying Gifts) RTM (Reindeer To Market)

Posted by Dave Jordan on Wed, Dec 07, 2016

Client :         Santa Claus aka Father Christmas, Kris Kringle, St. Nick or simply Santa

Market:        A large part of the World

Scope:          FMCG Reindeer Route To Market Distribution

Deliverable: Evaluation of RTM against sector benchmarks

table xmas.png

In summary, this Enchange project delivered:

  • A detailed evaluation of the Christmas RTM deployment highlighting strengths and weaknesses.
  • A grading of each core element in terms of capability to deliver the presents in comparison to benchmarks.
  • A framework development plan for parents and Santa Claus.
  • A clear business case for the continuation of Christmas. 

We would like to thank Mr. S. Claus for allowing us the opportunity to evaluate this important Reindeer To Market network. The network is in very good condition and we wish him every success on the 25th December.

Give your FMCG business a Christmas present and evaluate your Friendly Man Carrying Gifts (FMCG) Reindeer To Market (RTM) network. Need help with your RTM deployment? Click here and we will give you a call.

Santa image courtesy of stock images at freeditialphotos.net

                                               Other seasonal Yo Ho Ho posts:

FMCG_RTM_SUPPLY_CHAIN_HUMOUR.jpg* Santa & Opening Presents - Why S&OP is Invaluable at Christmas
* The Twelve Days of Supply Chain

Tags: FMCG, Christmas, Humour, Supply Chain, RTM