Supply Chain Blog

Successful S&OP - Can Jack Bauer save the plan?

Posted by Dave Jordan on Mon, Jul 25, 2011

Previously on S&OP. The Demand Review has taken place. The Supply Review followed on time and a mutual understanding reached. Despite considerable challenges in securing a date in the diary for all the key players the Pre-S&OP happened without serious injury or argument.

The following happens in real time on the day of the company Board S&OP meeting.

09:00     The telephone rang on Chloe’s desk with a sound you only hear on 24 – der der duh der. Averting her eyes from only 1 of the 3 screens she is scanning Chloe takes the call and quickly her face adopts the trademark scowl. It’s Jack! There’s a gap and not only that but two sets of deadly numbers are circulating. This has to be stopped and quickly as the Consumer Trading Unit (CTU) Board S&OP meeting starts at 14:00.

10.00     Jack slid into the Sales Department unnoticed through the fire exit taking care to leave no trace of his movements. His target was Tony, the National Sales Manager and he was in Jack’s sights. Glancing quickly to one side Jack saw Tony was alone and carried out a low forward roll to reach Tony’s desk while only slightly bumping the water cooler and forcing an unplanned water gloop. The gloop went unnoticed by everyone in the office except Tony. Tony looked down and saw Jack was heavily armed – the minutes of the Pre-S&OP meeting which had been seen generous use of the yellow highlighter.

11:00     Chloe was busy multi-tasking on her three screens running multiple protocols to try and save the S&OP plan. Time was not on her side and her lip curled again as she realised Jack had left his mobile phone to charge on a stack of paper next to the photocopier and could not be contacted. There seemed no way of avoiding presenting the Board with two different plans. Chloe picked up her personal mobile and walked with as quick and precise steps as her skirt would allow to the warehouse area and the archive store in particular. Behind the 1997 CTU stock count files written in dust with UV sensitive inked finger was what she needed; the number to the communicator chip system embedded in Jack’s left elbow and wrist by the CIA.

S&OP Monthly Meeting2 resized 60012:00     Jack unrolled the Pre-S&OP minutes and page by page showed Tony where clear agreement had been made on the plan for the following month. Tony was feeling the heat both from Jack and from his Sales team who were still complaining about low bonuses in the previous months. Sales still struggled to understand that S&OP was not just a Supply Chain issue. Reaching the last page of the minutes Jack fixed Tony with a cold stare glancing lower only once to take a quick peek at the strange little moustache Tony sported. Seeing the futility of standing in front of the Board with two very different plans, Tony relented and gave Jack his commitment to the single set of numbers.

13:00     Chloe need to know if Jack had been successful but with his mobile on charge and now the office landlines down she needed Jack's elbow to save the day. With shaking fingers Chloe tapped the elbow number into her personal mobile phone and pressed the green button.

                Back with Tony, Jack felt something he had not experienced for many years. His left elbow suddenly tensed sending the conical cup of water he was holding shooting over his right shoulder. What a piece of luck! Jack’s elbow and wrist were now in exactly the right position to take Chloe’s call without attracting any undue attention. Knowing he might be compromised Chloe spoke briefly to convey that she could not stop the dual plan attack. With tension running high and the 14:00 deadline fast approaching Jack was able to tap out the Morse Code for “the Sales guys are toeing the line” into his elbow. Almost immediately, Jack heard Chloe’s muted celebratory shriek coming from his wrist.

14:00     The CTU Board assembled. Preferring to stand Jack gripped the back of the leather chair, took a trademark sideways glance and declared “Mr President. We have one agreed plan to meet the CTU target for next month. The S&OP process worked and consensus has been reached.”

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

Learn the 10 Steps to Make S&OP Work in Mobile Telecoms

Posted by Michael Thompson on Fri, Jul 22, 2011

 

In my blog post Reasons for establishing S&OP in Mobile Telecoms, I recounted a success story of S&OP in a mobile telecoms company.  I then went on to discuss the principles of S&OP design in the post Learn the 8 Basic Principles of S&OP in Mobile Telecoms.

My discussions with Colin, our Mobile Telecoms Executive, continued.  Colin is a Senior Executive with a mobile telecommunications company with operations in several markets in Africa.

We started talking about the nuts & bolts of how S&OP could actually work in a mobile telecoms company. 

We designed the outline of an S&OP process including with a regional supply chain and operational structure in mind.  Diagrammatically the design we came up with was as follows:

S&OP Process for  Mobile Telecom

The process commenced with input from the regions within the country – we called this regional S&OP.  The demand review considered inputs from local marketing activity and the regions; the forecast also considered trade data. 

The supply review considered two main series of activities. The supply plan and product purchase plan considered the provision for mobile handsets and other items sold in the local market (NB some markets also used scratch cards that sold airtime). A network plan and equipment purchase plan looked at the supply needs to maintain the network.

Following a financial evaluation of the demand and supply plans, a national pre-S&OP consensus meeting was undertaken. The process concluded with the monthly S&OP meeting to agree the plans.  Following this demand execution and supply execution processes put the plans into action.

As it happened the design was similar to the one that Enchange has used in the past with mobile telecoms companies in African markets.

Let’s see if it does the trick for Colin.

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Learn the 8 Basic Principles of S&OP in Mobile Telecoms

Posted by Michael Thompson on Fri, Jul 15, 2011

In an earlier blog Reasons for establishing S&OP in Mobile Telecoms, I recounted a success story of S&OP in a mobile telecoms company. Reasons for establishing S&OP in Mobile Telecoms.

I continued my dialogue with the Senior Telecoms Executive – let’s call him Colin.  His company operates in several markets in Africa.

S&OP in Mobile TelecomThe challenge we set ourselves was to design an S&OP process for a mobile telecoms company.

In the first instance we explored some of the basic features of S&OP. 

Mike: Do you remember how we started in your last organisation?  (Colin used to work for an FMCG multinational in Africa.)

Colin: I seem to remember we started with some principles.

Mike: Exactly.

Colin: So what are the basic principles of S&OP in mobile telecoms.

Mike: To a great extent the same basic principles apply in mobile telecoms than they do in any other type of business.

Colin: How can that be? Mobile telecoms is an entirely different business.

Mike: You are confusing process design with basic principles.  While the design of S&OP in a mobile telecoms business is different, the basic principles still apply.

We then spent some time discussing the basic principles of S&P in any business and tested these assumptions in mobile telecoms.

Here is the list of 8 Basic Principles of S&OP in Mobile Telecoms:

  1. S&OP is a collaborative cross functional process that engages all functions to produce an integrated set of plans that all are committed to support. 

  2. The plans cover a sufficient time horizon to enable resource planning & support the annual & strategic planning processes.

  3. Its purpose is to balance demand & supply in the supply chain. 

  4. It is performed periodically – monthly or weekly.

  5. It aligns operational plans to high level business & strategic plans.

  6. It can be implemented at a market, regional or global level.

  7. At its core is a single set of numbers for the business.

  8. It uses standardised processes, calendars of events & meetings &  KPIs.

There then followed a further discussion about the design of S&OP in mobile telecoms. 

I will; discuss this in a later blog.

S&OP in Mobile Telecom in Africa

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Shock, horror, probe - Use the same RTM Distributor as a Competitor?

Posted by Dave Jordan on Mon, Jul 11, 2011
Impossible, over my dead body, not in a million years - the usual knee-jerk objections to any suggestion of getting too close to a competitive operation. Such comments are usually spouted by Marketing colleagues who are frankly living on agency lunches and in the past. These colleagues are the same people who moan and groan continually about Logistic and Distribution services without ever bothering to understand either discipline.

The CEE is a relative desert in terms of top drawer Distributors so you might think about thinking the unthinkable!

Myth 1. "Mr. Competitor will find out about our new product before the launch date."

If you think your advertising agency can keep its mouth shut then you are extremely naïve. Whispers about a new launch or promotion will abound long before Mrs. Popescu sees it on the shelf. (Tip. If you want advance warning of new launches go and look at office windows and see how many new sku's are there for all to see.) Secondly, in most CEE markets and certainly in Romania all new products have to be added to price lists well in advance of the on-shelf date. Once data is on a price list it is in the public domain and readily available to your competitors.

Myth 2. "Mr. Competitor will know all my volumes and stock levels."

Firstly, you are assuming that Distributors cannot be at least as professional as your own company. Why? The good Distributors ARE confidential and take great care to maintain sensible segregation of duties. All major players monitor sales and stocks in the market either in-house or via one of the usual agencies. If you are worried about going stock-out on a certain sku then you had better make sure your upstream supply chain gets its own act together via S&OP.

Myth 3. "The Distributor will favour the competitor in selling situations".

Ok, we are getting to the point. You do not haCompetitive sales representativesve to use the same sales force. A dedicated sales force will ensure your products receive the desired focus. The Distributor skills and competencies in organising the network will be shared but at the sharp end there is dedication. If you do share the same sales force then the key point is how you reward them. Make this competitive and you will get equal exposure and push.

Good and reliable Distributors are in short supply in CEE so think carefully before rejecting the possibility of aligning with a competitor.

Your key competitive edge should not be Logistics or the Distributor but it should be your Brands at the point of sale. If the Marketing guys can leave their never-ending lunches they should be able to do something about that!


Tags: FMCG, Dave Jordan, CEE, Traditional Trade, S&OP, Forecasting & Demand Planning, Logistics Management, Distribution