Supply Chain Blog

“People and Process lead – IT supports” Regional & Global S&OP Critical Success Factors

Posted by Christian Cusworth on Fri, Jul 30, 2010

IT system enables S&OPThis is a debate that I am starting to loose, I’ll stick with it though at least until such time as IT systems develop intelligence and personality. The theoretical debate on the role of IT in S&OP will of course run for a long time, hence this week’s blog highlights some past approaches to IT interaction that have delivered positive results.

Key also to a successful S&OP programme (and less contentious) is the need to accurately measure performance and success. Thoughts around this area are also highlighted below:  

IT – Key Enabler :

  • Be careful not to let IT lead the project.
  • But the business & financial success of the programme is directly proportional to SAP effectiveness, cluster planning tools, data capture and master data management.
  • Do not let IT cause excessive delay – people will lose interest.
  • Consider interim IT tools – these can work extremely well & maintain programme momentum.
Measuring Performance & Success:
  • Decide programme outcomes in advance.
  • Decide what is not negotiable.
  • Be prepared to learn and adapt during the programme.
  • Use established PM methodology (e.g. Prince 2) – plan, review etc
  • KPIs – consider Balanced Scorecard
  • Build End Market success into GM bonuses

***

Also in this series:

Tags: ERP/SAP, KPI, S&OP, Forecasting & Demand Planning

A gift from the FMCG Drinks Distribution Agony Aunt

Posted by Dave Jordan on Fri, Jul 30, 2010

Dear Frustrated of FMCG Drinks,

Thank you for your letter, which was a delight to read. Believe me; you are not alone in having such feelings and concerns. There is nothing worse than seeing the world’s greatest drinks salesman shining downand not being able to meet the demand of the thirsty masses. This frustration plus the lack of return on valuable investment can leave even the calmest of souls agitated and depressed.

However, do not despair. As I said you are not alone and this is not the first time I have seen this problem. You need professional help to receive the Route To Market/Distribution therapy you need.

Firstly, you must overcome 2 important barriers. The first is that you cannot assume your existing Distribution network is entirely suitable for the job in hand. Secondly, you must look at yourself in the mirror and realise that you are not perfect either. If you can do these 2 things then help is at hand.

Using this simple checklist and guiding definitions you can take a critical look at how you manage your Distributors and how they manage your business on your behalf. Some of the questions are searching and may cause you some discomfort but this is necessary in order to accurately evaluate what is going well and what can be improved.

Do not keep this to yourself. The effective management and exploitation of a robust and proactive Distributor network is a team effort requiring buy-in from all Board colleagues and peers. Keeping this problem to yourself will only increase the caffeine intake and accelerate the hair loss!

I will always be pleased to help you and look forward to your feedback on a very positive experience with the checklist. Cure the problem, do not treat the symptoms!

Yours soothingly,

The FMCG Drinks Agony Aunt

 

Free RTM  Assessment Tool v2

Tags: Brewing & Beverages, FMCG, Route to Market, Dave Jordan, CEE, Distribution, RTM Assessment Tool

S&OP – that’s Sails & Operational Planning

Posted by Michael Thompson on Fri, Jul 30, 2010

 

It’s amazing how the mind wanders when one is stuck.

Sailing and S&OP

In my case I have just started a sailing holiday with family in tow.  Here we are in the South of France west of Marseille, boat at the ready & raring to go.  Problem – there is a Mistral blowing.  The Mistral is the prevailing wind in these parts that whistles down the Rhone & fans out into the Mediterranean, and when it blows it sure does blow.  And when it blows it’s c’est la vie & no sailing.

So we are stuck. 

So the mind starts to wander.  For reasons I cannot explain, my mind wandered to supply chain & my challenge to continue the blogging while on holiday – thanks Nora. 

Then I thought about Sales & Operational Planning (S&OP) & its application (or otherwise) to sailing.

The demand side – I have an eager family (customers) waiting to be satisfied.  There is a KPI in there somewhere.

The supply side – I have a boat ready to sail with all scheduled maintenance complete, fuel tanks full, water tanks full, safety gear checked & all other checks complete.

The plan (ok, I admit that it is vague) – sail to Italy & back to Port Napoleon (Rhone Delta).

Any constraints?  Well there is the Mistral of course.  And for the time being this is a show stopper.  So I need a Plan B, so to speak. 

Always remember the customer & demand side – “satisfy the family”. 

So off I go to the Capitainerie (Harbour Office in France) & discover that we are very close to the Camargue that borders the Rhone delta & is full of nature, salt flats, flamingos & a whole world of adventure. 

So I hire a bicycle & go for a reconnoitre.  I discover a route to the Camargue via a ferry river crossing & visit a local tourist office on ‘the other’ west side of the Rhone.  Plan B is formed & off we all go the next day for a wonderful day trip.  Lunch is partaken, a salt museum is visited (yes one does exist), flamingos are spotted, exercise is had and the family are happy (if a little weary & saddle sore). 

I could claim that S&OP, as it currently applies to our family, has worked for now, albeit not to the original plan ....

More later ....

***

In this series:

Oscar Supply Chain Blog

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

S&OP Regional/Global Critical Success Factors:"We are communicating"

Posted by Christian Cusworth on Fri, Jul 23, 2010

This week’s success factors cover the areas of organisation and people when developing S&OP.  Some time ago the president of a major CEE trading group summarised the outcomes of a business wide S&OP implementation in three words “we are communicating”. Initially the feedback seemed less than inspiring, however, as time passes and we work to improve S&OP in other businesses maybe his simple summary is what we should strive to achieve every time. With this in mind here are some key considerations relating to Supply Chain organisation and people. 

Organisation:

  • The normal wisdom is to make sure the organisation changes are driven by the process changes and not the other way around.  However, if GMs are very powerful (there may be legal entity constraints that support this power), a powerful central organisation may be needed in advance to drive the change.
  • Consider an ‘evolving’ organisation (say 2-3 years) that establishes cluster management but retains a degree of flexibility with detailed reporting. 

People – Key Enabler 1:

  • HR – remember that there will be changes to roles which will need job evaluations and related changes to grading, remuneration etc.  For EU countries there are legal considerations regarding these changes including the need for consultation.
  • Training – this is always key especially at End Market level.
  • Communication – keep everyone informed at all levels.
  • Make sure the End Market General Managers are on-side and supportive of the change; make sure the local End Market HR manager is part of the change programme

Related articles:

S&OP Supply Chain FMCG

Tags: FMCG, CEE, S&OP, Forecasting & Demand Planning

Viva Africa United :World Cup Business Improvement

Posted by Michael Thompson on Tue, Jul 13, 2010

Well its over & the African showcase that was the World Cup has finished.  As Spain (deservedly) celebrates and the circus leaves town, I am left to wonder “what next” for the continent?

Viva Africa UnitedThankfully I am not the only one in a similar reflective mood.  David Smith considers LAWC (Life After the World Cup) in the Guardian.  His article includes reference to this being a “transformative moment” on par with the release from prison of Nelson Madela.  He also cautions against premature optimism.  This is wise.

My musings, my concerns are somewhat broader. 

In the aftermath of a dismal England exit, I was in a similar reflective mood.  It was something of a “what has the World Cup done for us” moment as borrowed from Monty Python’s Life of Brian.

 

I return to my first World Cup blog, “Africa, the World Cup, & Supply Chain – what’s the connection?”. It will take many generations for Africa to reach “a ‘tipping point'; the point at which Africa emerges into an economic block that the world has to take seriously. A transition from recipient of sympathy and aid to proud and able wealth.”

So now that the show has left town, how will things change for most South Africans & Africans? How will their lives have been enriched?

I remain an ‘Afro-Optimist’, of the glass half full persuasion.  As the attention of the World Cup fades, I believe that the collective conscience has been changed for good & forever.  Our South African hosts have, I believe, left a positive legacy for the continent.

And fittingly this was reflected in a banner at the end of Sunday’s final that read “Viva Africa United”.

 

Photo credit: babasteve

Tags: Michael Thompson, Doing Business in Africa

Regional & Global FMCG S&OP - Critical Success Factors

Posted by Christian Cusworth on Mon, Jul 12, 2010

The following blogs will address key points of consideration when embarking on a regional or global S&OP implementation. Part one covers the areas of End Market commitment & ownership and Process Design.

End Market commitment & ownership:

  • End Market ExCos tend to be sceptical about these type of programmes especially as they fundamentally impact their role & (perceived) power.
  • The GMs can make or break the programme.
  • Programmes tend to need a ‘sell’, NOT a ‘tell’ approach.
  • End Market team engagement are always critical.
  • The initial message from HQ will be very important in establishing realistic expectations.

 Process Design:

  • Keep it simple at ‘Cluster’ level – e.g. process outline, roles definitions and key dates.
  • Standardisation – key is the establishment of regional (e.g. European) key ‘process parameters’ with local End Market interpretation and ‘reasonable’ boundaries.  Keep the rules robust and to a minimum.
  • Procedural level – use development of these at End Market level as an opportunity to develop local ownership with local teams

***

Enchane S&OP posts

More on S&OP? Check out the below posts!

Tags: S&OP, Forecasting & Demand Planning

A letter to the FMCG Drinks Distribution Agony Aunt

Posted by Dave Jordan on Fri, Jul 09, 2010

Dear Agony Aunt,

I have reached the end of my patience. I’m drinking too much coffee, I smoke like a chimney, I’m not eating properly and I just cannot sleep. I did not see any of the World Cup nor Wimbledon and now even my kids call me Uncle Dad as I spend hour after hour at work. At times, a short step off a tall bridge does not seem such a bad idea. These Distributors are killing me!

DrinkThe world’s greatest drinks salesman is glowing bright yellow in the sky. Consumers are literally gasping for drinks yet we cannot get our products onto shelves and into coolers. We have given the Distributors some very focused incentives and we are spending thousands on quirky TV ads with that irritating Pop Idol geek with the funny hair. There is no doubt our brand awareness is right up at the top level yet we just don’t sell as much as we should!

When the weather is this hot consumers want a drink when they are thirsty and not when Joe Egg the Distributor can be bothered to turn up in his smoke belching van to replenish stocks. If our product is not sitting invitingly in a cooler the thirsty masses simply take an alternative product. Consumption is immediate, I have lost a sale and this drives me mad.

Please, please help me. Tell me what I should do before I lose even more of my hair.

Yours,

Frustrated of FMCG

 

CTA Distribution resized 600

Tags: Brewing & Beverages, Route to Market, Dave Jordan, Traditional Trade, Distribution, Inventory Management & Stock Control

Oh Ghana: Supply Chain Progress denied by the hand of Suarez

Posted by Michael Thompson on Tue, Jul 06, 2010

Oh Ghana, Ghana! wherefore art thou Ghana?

Deny thy goal by penalty in the last minute of extra time and refuse thy destiny;

Or, if thou wilt not, be but sworn to do better in the shoot out,

And we’ll no longer be denied an African team in the semi-finals.

.... and so a continent mourned in noble defeat.

.... And to address my own earlier question (not answer it, please note):

“What has the World Cup done for them?”

It has given a continent hope, albeit briefly & albeit on a football field in Johannesburg.

It may not be Romeo & Juliet, but there was something of a Shakespearean tragedy about this football match.

Ghana World cup and Shakespeare

Learn what the P.R.I.C.E. of doing business in Africa is!  " target="_blank">Download the free whitepaper here! 

Tags: Humour, Michael Thompson, Doing Business in Africa

The players in a high performing Supply Chain

Posted by Dave Jordan on Mon, Jul 05, 2010

There are no individuals in this team. This is a team where the whole is far greater than the sum of the parts. The Supply Chain operates quietly and often in the background but is an essential team for any business.

Team Sheet

Goal Keeper 

S&OP – reliable and a safe pair of hands. Nothing gets past; no slip ups!

Left Back 

Demand Planning – always one step ahead, likes to get forward.

Lentre Half

ERP – robust yet flexible, covers the entire pitch.

Centre Half

Procurement – buys time for his colleagues; a valuable team player.

Right Back

Supply Planning – a constant supply to midfield and attack

Left Midfield

Manufacturing – a play-maker; a reliable supplier of the goods

Right Midfield

Warehousing – physically big and strong; contributes loads.

Holding Midfield 

Transport – swift; seamlessly links defence with attack.

Central Midfield

Customer Service – attentive and vocal; keeps an eye on delivery. 

Striker

Route To Market IKA – fast, direct; on time and in full.

Striker

RTM Traditional Trade - well built and knows where the target is.

Supply Chain TeamSubstitutes

SKU Complexity Reduction – useful towards the end of the game to simplify and refocus the team.

Green - Sustainability – an upcoming youngster who is set to play a major role in the future.

Coach

KPI’s – keeps a close track on the team and individual performance. Knows where the weaknesses are.

Perhaps you would like to suggest an alternative line-up?  Who do you think should be in the Supply Chain starting eleven?

Tags: SKU, FMCG, Route to Market, Dave Jordan, KPI, S&OP