Supply Chain Blog

7 Top Tips To Tip-Top Customer Service in FMCG, Drinks & Pharma

Posted by Dave Jordan on Thu, Apr 28, 2011

Do FMCG, Drinks & Pharma Companies delude themselves on Customer Service? I think some may well be doing this and may or may not know it! Whatever service related KPI you measure the aim is designed to see how you are performing both internally and at a retailer or outlet level, against peers.

Customer service improvementThere are many ways of measuring the performance including OTIF, CSLM, CCF and CCFOT amongst many others. Essentially you are measuring how much of the right stuff you delivered to the right place at the right time. Importantly, it is not value based – you might measure that internally for monthly progress monitoring but it is irrelevant for service measures.

Some common errors in Customer Service measurement and management:

  1. Service should be measured per sku thus avoiding the possibility of hiding poor performance in one area with exceptional performance in another. Measuring by sku allows you to hold the right people accountable and ensure improvement resources are appropriately applied.
  2. Are you measuring against what the customer ordered or what your team said he could order? This is a common error particularly when order capture is in the hands of employees rewarded via value based sales incentive bonuses - “We don’t have that but you can have some extra of this”. You need to see the raw demand from your customers to really see what they asked for and what they actually received. There is no problem with substituting products with customer agreement as this maintains the relationship and should result in sales but this must be a visible process.
  3. Yes, of course the customer may ask for unreasonable amounts of a certain standard sku or promotion pack but hiding the “data blip” is not the answer. Addressing the issue with some collaborative planning would help both parties. For some reason they asked for a huge shipment; find out why and be more ably prepared to service the demand next time.
  4. Use an ERP that automatically allows you to allocate reason codes for service failures and get them investigated promptly. Focus on the big wins using the 80/20 principle; don’t spend too much time finding out why you did not deliver 5 boxes of washing powder and do spend time on the failure to deliver large volumes of high value beauty products.
  5. Get your service level on the agenda of the top table in the company. Your service level is a function of every single person in the company and is a reflection of how well you are performing in the market. This means the marketing guy and the HR guy and others must be involved. Avoid the usual sales approach of blaming all failures on everyone else. This is pointless, immature and hardly team working best practice! Celebrate successes widely and noisily.
  6. Do you have a Customer Service department led by a talented individual who is graded as highly as peers within the company? CS is a very important function and it should enjoy equality of importance within the business. Also, CS is not just about taking orders and printing invoices. Customers deserve the opportunity to talk to a real human being (avoid answer phones!) about their problems and concerns. Small issues in invoice accuracy which can delay payments of thousands of Euros can be sorted out by knowledgeable and concerned staff motivated to really help.
  7. Make the CS measure highly visible around the company – everyone should be aware of the overall CS their company is offering to customers. Don’t fall into the trap of accepting low or “sand-bagged” targets – you are likely to achieve them and that gets you precisely nowhere. If you deliver to Retailer platforms you might wish to check where your measure is recorded.

Customer Service = Satisfied Customers = Sales = Jobs/Pay/Bonus = Satisfied Staff

Tags: Customer service, Brewing & Beverages, FMCG, Logistics Service Provider, Dave Jordan, Pharma, KPI, Logistics Management

How Do Customers Perceive “Customer Service, Customer Care”?

Posted by Dave Jordan on Thu, Apr 21, 2011

After two incidents (three really) of poor Customer Service on the same day I felt compelled to put fingers to keys and share the experience! All of you working in FMCG, Drinks or Pharma - amongst others – should look closely at how your Customer Service or Customer Care initiatives operate.

During a business call on Skype the internet connection was suddenly lost. This is not that surprising bearing in mind where I live and the service is usually resumed in a few minutes. However, after an hour I was still unconnected with the outside world. Was something happening I did not know about? Did Arsene Wenger actually see a foul by one of his own players? Was someone famous about to get married? (Bill and Katie left me off the list too, never mind but perhaps an email was waiting inviting me to put on my best frock and get to the Abbey.)

Improve your Customer Service OperationsSo I called the ISP and braced myself for the mathematical memory challenge to get past the recorded robot to speak to a breathing human being. After the first burst of a non-English language I was invited to “press 2 for English” – it is working, was my naive thought. There followed a set of menu choices also delivered in English. I selected the option for internet service and then I gleefully pressed “0” to speak to a human being who would take care of my problem and get me reconnected to the world.

The female voice greeted me in her native language and her job title containing “Customer Care”. Ok, no problem with that, I am English and therefore mono-lingual but I know enough to get through the pleasantries and then I spoke in English.

“Can you help me reconnect my internet service?”

“No” replied the lady confidently – she obviously meant it and quickly put the telephone down.

Probably my fault. Did I navigate the maths-memory challenge correctly? Did I dial the Indian dial and deliver by mistake? In the context of my question and the take away menu then “no” would indeed be the correct answer. I try again and once more listen to a reel of adverts for items I do not need until I reached press zero time again. Things should be ok this time. I guess the lady was not actually an English speaker and picked up the English line by mistake. Aha, the gruffer tones of a man received me the second time.

“Can you help me reconnect my internet service?”

“No” replied the man equally as confidently as the lady before.

Before his digit could reach the red button I threw in a trapping retort.

“Why?”

“Because I don’t want to” came the response before he pressed the red button and activated the modern-day version of a hastily slammed phone.

I was not a happy chappy by this stage but I had to get reconnected so once more unto the breech dear friends…..Third time lucky was obviously in play as I raced through the maths and found someone at the end of the telephone who spoke English and actually wanted to help me.

“Can you help me reconnect my internet service?”

“Yes, of course. Please give me your subscription details.”

After being successfully identified, the nice man on the line told me why I was disconnected in the first place.

“You have not paid your latest invoice. This is why we cut you off.”

Despite a rise in temperature and associated blood pressure I calmly rejected this and provided the date and time and value of the payment I had made in good time.

“Can you provide the transaction reference number?”

“Well, I paid via the internet and I cannot recall the 8 digit transaction number.”

“Can you check with your internet bank now and tell me the number and then we can reconnect you?”

“Did you really say that”, I asked with remarkable degree of calm………….

Finally, as you can see I am back on line after a very frustrating brush with “Customer Care” and a not insignificant telephone expense.

If you are in the FMCG, Drinks or Pharma industries and offer a Customer Service or Customer Care call centre (and you should if you want to succeed) then you might just test it out yourself and really see what impression is being provided to your customers. All the hard work deployed in the Supply Chain and through Route to Market can be ruined in one simple phone call.

Right, closing down for Easter now and looking forward to raising my BMI towards 30! Bring on those chocolate eggs.

Tags: Customer service, Brewing & Beverages, FMCG, Dave Jordan, Pharma

Top 10 Supply Chain New Year Resolutions: Making Progress?

Posted by Dave Jordan on Tue, Apr 19, 2011

So, we have reached April and Q1 is already done and dusted; how were your results? Be honest, did you push, push, push to make last year’s final number and shoot yourself in the foot for Q1? From what I understand very few companies will have had a comfortable end to the quarter. Whatever business you are in e.g. FMCG, drink, pharma, the markets remain very difficult.

Supply Chain New Year's ResolutionsDid you make any Supply Chain resolutions? If you did you may already have broken them but let us recap at those I suggested towards the end of last year. There might still be time to maximise the effectiveness of your extended supply chain and have a storming end to the year!

  1. Supply Chain Awareness – this one is not time dependent so do this at any time and you will achieve a greater SC understanding around the business.
  2. Sales &Operational Planning –the principles of S&OP are designed to prevent “offline” or stock-loading decisions and this may well be the process to avoid a repeat of the year-end push. If you do not operate a robust planning process then you might consider implementing S&OP. Sooner or later all your competitors will be operating at least something similar and you will be left behind with negative growth when the markets warm again.
  3. SKU Complexity – this really is a no brainer and again, not time dependant. If you have limited resources and financial budgets then you need to ensure you are backing the most profitable skus. Filter out those skus which really do not add any value – you will have some.
  4. Route To Market – if you are in a business heavily influenced by the weather , e.g, drinks, ice cream, DIY then now is the time to stand back and see exactly how well your network is equipped. Once the world’s greatest salesman is shining bright it is too late for the year. The summer period will make or break those weather sensitive businesses and there is simply no opportunity to play catch-up.
  5. Sales & Marketing Buy-in – in parallel with the SC Awareness resolution this could actually make difference. Once people understand how their decisions affect the rest of the company they may actually join the team rather than sit outside sniping!
  6. Proactive 3PLP’s – have you met them recently to review performance? Did you meet at the appropriate level in the organisation? 3PLPs require constant attention and monitoring. Failing to give your 3PLP sufficient surveillance will have a direct and immediate impact on your business performance.
  7. Reduced Stocks – unsuccessful promo packs still gathering dust? That blockbuster new product launch that did not meet aspirations is still in the racks? Look at your stock levels on a regular basis and keep your chain lean.
  8. Improved Customer Service – ultimately the measure by which you can gauge and improve your business performance. If you do not know your CS Level on a daily basis by sku then you are not in control of your destiny.
  9. Use the ERP – this one keeps coming back as an issue for major companies who have invested heavily in big-name ERPs.  While they certainly have a role to play the use of a “shadow spreadsheet ERP” is damaging.
  10. Continuously Improve – keep innovating and improving your Supply Chain. Don’t be afraid of new initiatives like retailer platforms; work with retailers to erase the problems and produce big win-wins!

Yes, there really is still time to change your business performance by getting improved value from your Supply Chain and it is not rocket science.

Tags: Customer service, SKU, FMCG, Route to Market, Dave Jordan, Pharma, ERP/SAP, S&OP, Logistics Management, Distribution

RTM. Hear Mungo Jerry sing about the World’s Greatest Drinks Salesman

Posted by Dave Jordan on Thu, Apr 14, 2011

Everyone involved in selling any type of beverage looks forward to those hot, hot days of summer when the sun is shining and drinks are moving quickly off shelves and out of coolers. This is a time when sales people can relax a little and let the large yellow planet do their work for them. However, there is a limit to how much people buy and consume even in summer so how do you ensure your brands are right there in front of faces and available for sale.

RTM Improvement Ebook

This musical Route To Market (RTM) story can help you increase market share and your bottom line.

In the summertime when the sun shines high,
you can stretch your sales up to the sky,
when the weather's fine,
you got volumes, you can raise your bottom line.
Have a think, have a drive,
go out and see what you really find.

Distributor good, take him out for a meal.
If he’s poor, what does it reveal?
Time to make a change,
Do a test, do a check but do it right.
When the sun goes down, you can’t make it,
make it good your bottom line.

We're Distributors, and we're generally keen.
But if no-one tells us, then we do as we think.
When the weather's fine
we’d go selling if you would work with me.
We can be happy,
drinks for drinking, to raise profitability.

Sell along with us, dee-dee-dee-dee-dee.
Da-da-da-da-da...Yeah, now we're happy,
da-da-da-da-dah.

When the winter's here, opportunity!
Invest; study RTM, do the right thing.
It'll soon be summertime, and we'll sell again,
we'll raise sales and therefore the bottom line.
You’ll be rich, if you take my advice,
raise your drink sales of every single line.

Not quite sure how the melody goes? Check out below!


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

Job Opening: Supply Chain Director FMCG, Brewing, Pharmaceutical

Posted by Dave Jordan on Tue, Apr 12, 2011

The majority of Supply Chain Director-level openings paint a picture of dynamic, forward thinking companies already operating at top performance and requiring you just to “keep the ball moving”. This is not always the case so I wonder how an advert would look if a degree of realism was added.

The Company

A blue chip multi-national operation with strength and growth aspirations in Developing & Emerging markets.

The Role

Direct the entire length of the Supply Chain covering Source, Plan, Make and Deliver. You will also be expected to take on the role of Security, Safety, Health & Environment and QA with no extra remuneration. (Other non SC responsibilities may be added at any time without notice.)

Candidate Profile

  • A university degree; preferably in a technical subject.
  • Experience in running a complex and fast-changing Supply Chain.
  • You will have experience raising children as you will be required to clean up the mess made by colleagues.
  • Immense patience, e.g. when explaining the importance and difference of Forecast Accuracy and Forecast Bias to Sales & Marketing colleagues.
  • Good control of pain and movement to remove frequent knives from back.
  • Experience in using a crystal ball would be an advantage.
  • A thick skin; no wait, a very thick skin.

Supply Chain Director resized 600Key Responsibilities

  • For anything that goes wrong.
  • Running the Sales & Operational Planning process even though Sales & Marketing are not really interested and in fact, neither is the boss.
  • Explaining  what all those SC initials mean – again and again!
  • Converting the Sales “forecast” in to something vaguely realistic and actionable.
  • For “lost sales” when Sales manage to sell 3000% over agreed forecast.
  • Closing the month with the required numbers despite the appalling forecast and the month-end sales peak.
  • Delayed launch and promotion introduction despite Marketing failing to adhere to one single deadline.
  • Accommodating each and every sku introduction.
  • Storing the obsolete, failed launches, old promotions, gross overstock and slow moving stock.
  • All write offs and stock losses.

Pay and Benefits

  • You will be remunerated well but lower than colleagues.
  • Your medical benefit subscription will be the most used of the entire company.
  • Career advancement is very difficult and you will be overlooked for any GM or CEO opportunities.

Next Steps

If you are interested in joining one of the worlds’s biggest companies then please check out our other Supply Chain humour here.

(Internal HR note not to be published: If nobody applies please remove the requirement for experience.)

Tags: Logistica Management, Dave Jordan, Humour, Performance Improvement, Supply Chain, Forecasting & Demand Planning

Supply Chain and S&OP Convergence – Checking Compliance

Posted by Michael Thompson on Thu, Apr 07, 2011

Why don’t people just do what they say they will do?

This, in a nutshell, was the substance of a discussion I had last week with a senior supply chain executive of a Fortune 500 FMCG multinational. 

It is also similar to many conversations I have had down the years with executives disappointed with the extent to which change has occurred as a result of multi-million dollar change programmes.

I will describe this particular case by paraphrasing our discussion:

Supply Chain Executive (SCE): “We have just completed a global convergence project. It has cost several millions of dollars. In addition to an SAP upgrade, it also aligned our global and regional S&OP processes.

I have just completed a tour of my region (Africa Middle East).  I am very disappointed about the lack of progress with the S&OP project.  In summary, people, including senior management, are just not doing what they are supposed to be doing.  They all signed up to the programme but are not complying with the new global standards that have been agreed.

Why is this & what can I do about it?”

Michael Sympathetic Ear (MSE): “What is happening?  And what is not happening?”

SCE: “It’s a mixed bag.  In some Operating Companies (OpCos), the process is in place but at a very superficial level.  For example, key meetings seem to be happening but I know that key operational decisions are being taken ‘behind the scenes’.  In some OpCos, key parts of the process are not working well or are totally absent.  In other OpCos meetings are not taking place at all.”

There followed a discussion of how the programme had been conceived and rolled out.  It is true to say that some of the key levers of change management had been overlooked, notably in the failure of true engagement with senior management prior to and during the programme, and in the absence of proper involvement of operational management in deployment.

However, the question is - what should this senior executive do to address the current situation given the current situation?

I return to our discussion:

Mike Sympathetic Ear (MSE): “What processes have you put in place to ensure monthly compliance?”

SCE: “The main reason for my tour was to check implementation progress.”

MSE: “Yes but what about an operational process undertaken at local level to check compliance?”

SCE:  “Nothing operational as such.”

MSE: “Well there is something you can address straight away. You need to understand what is actually happening (or not happening) on a routine monthly basis.  A tour by senior management will only give a ‘snapshot’ at best.

SCE:  “Ok.  How do we do that?”

S&OP Process Compliance

MSE: “Use your Supply Chain Operating Model (we had established that one existed & that it was sound and documented) to create a checklist of monthly activity. Subdivide the list by key activity (e.g. Demand Review, Supply Review, Financial Evaluation, etc). Define for each activity what constitutes compliance.  Assign a local process owner to each key activity (this had in the most part already happened) and make them responsible for formally reporting compliance each month.  Include a short narrative on status and future improvement. Keep it simple – i.e. it should take no more than 10-15 minutes each month for a process owner to complete.”

SCE: “That could get resistance.  Management are very busy.  They may think it’s a bit ‘Big Brother’ with Head Office checking up on them.”

MSE: “If they complain about either, something else is probably wrong.  In that event, you need to understand what the ‘something else’ is.  Let me be blunt.  You spend millions on a new convergence project, a key component of which is clearly not working.  Surely the very least you should be doing is checking that people are doing what they signed up to do.”

SCE: “Fair enough. Sounds like it’s worth a try”.

Compliance checking is a key part of project monitoring and evaluation. And it is not difficult to do. 

Enchange has developed compliance tools that can greatly help the process.  If you would like more information, please do contact us.

 

  S&OP Compliance

Read other posts regarding Compliance HERE.

 


Tags: FMCG, Michael Thompson, S&OP, Forecasting & Demand Planning, Compliance