Supply Chain Blog

Roberto Di Matteo and Managing Supply Chain Change

Posted by Dave Jordan on Thu, Nov 22, 2012

Sorry to repeat myself but Roman Abramovich is like a man who constantly returns cheese to the supermarket complaining it is mouldy and nobody is brave enough to tell him it is Roquefort. I can hardly believe I write that same text only 262 days after it first appeared.

You do not like the approach and achievements of the previous manager so you appoint someone new. Fair enough, I hear you say. One of the failings in the previous management regime was a perceived lack of success so the new man must be measured against his own collection of silverware. One FA Cup win plus an admittedly fortunate Champions League win on penalties (yes, an English team won on penalties) and you would think a change for the good had been made.

Instead, Roman shows whaSupply Chain and Football resized 600t a confused warrior he is by dismissing the man who delivered exactly what he craved from a multi-national multitude of former top-drawer coaches.

Previously I looked at the dismissal of Andre Villas-Boas in the context of Supply Chain change and I reprise that here with reference to the 262 days of RDM being in charge at the Stamford Bridge revolving door.

  1. Objectives: Set objectives and make them and the associated timescale very realistic. ……er, two of these were probably to win the FA Cup and Champions League.
  2. Commitment: Agree the project at the top table and communicate by selling not telling. RDM took on a job many others would not want knowing he would be sacked one day but not quite so soon. RDM was committed but RA obviously was not.
  3. Expectations: Constantly manage expectations upwards AND downwards in the business. Expectations were tournament wins and this was delivered on time in full. Perhaps there was another expectation we do not know about?
  4. Communication: Communicate progress frequently, clearly and honestly at all levels. Communication appears to be a problem here as most people did not expect the dismissal and RDM had not even had a “vote of confidence”.
  5. Training: Does the team have the skills and competencies for the future reality. Identify gaps sooner rather than later? Key signings of quality players were made to cure known weaknesses, e.g. Hazard, Oscar.
  6. Celebrate: Celebrate significant milestones and keep interest high. Both trophy victories were celebrated, even by the captain who was not even playing in Munich but lifted the cup.
  7. Manage: Appoint a dedicated and respected Change Manager to guide the overall process of change in the business. Apparently, this was RDM and he has departed in this latest round of Russian roulette part way through the process.

From the previous Chelsea blog, “If you have identified change is necessary then some careful preparation and planning is more likely to bring you success than a petulant, knee-jerk, short term reaction”. Chelsea is a business just like an FMCG or Brewing or Pharmaceutical company and change management in all of these is critical or you will fail.

Good luck Rafa Benitez!

Catch up with other Supply Chain related football blogs here.

Tags: Dave Jordan, CEO, Humour, Performance Improvement, Supply Chain

FMCG Drinks : The Downton Abbey Supply Chain Drama

Posted by Dave Jordan on Wed, Nov 21, 2012

The ancient Rolls Royce slowly chugged up the lane toward the big house. The thin wheels crunched at the white gravel as the car came to a halt opposite the imposing doors of the Abbey House. A full squad of staff in white and black livery was waiting patiently in the soaking rain to receive the guests for the weekend event.

Inventory Managemnt Downton Abbey StyleCarson, his hair even flatter to his head due to the rain walked forward with an umbrella to allow the two guests to avoid a similar soaking. Once greeted by the Earl and Countess the guests were fussily ushered inside to recover from the onerous journey while the maids and footmen emptied the car of far too many belongings for one weekend. How many hats can you wear in three days? Logistics complete; and the car chugged away out of sight.

Below stairs the Laurel and Hardy-like duo of Mrs. Patmore and Daisy started the gala dinner preparation. Daisy, perhaps the thinnest assistant cook in the history of period drama TV stirred a vast pot of near-boiling soup.  Mrs. Patmore had her hands hidden inside a voluminous brown baking bowl as a large mound of yellow-white dough was kneaded into submission. Meat and game dishes steamed and bubbled as the dinner bell approached.

Above stairs Carson and Mrs. Hughes marshalled the team as they carefully laid out the required cutlery and crockery demanded of such a fine dining experience.  The location of each and every piece was accurately measured and re-measured. There were no traffic light KPIs here as everything HAD to be perfect; there was no other option possible.

With an unnecessary pause for dramatic effect Carson scanned the room and then rang the bell to alert those above and below stairs that dinner was served. Soon a variety of family and house guests in seemingly uncomfortable clothes floated in and shared canapés and pre-dinner drinks. The chatter continued about the scandals of the day; what the Royals were getting up to, the latest society divorce and whether there was a future for electric telephones.

Guests ploughed through the early courses and then Lord Grantham himself decided to carve the main course meat dish. Task complete and very pleased with himself he called for Carson to serve some more red wine.  Carson moved to oblige but quickly realised something was wrong. The decanters were empty and he knew there was no more of the same wine in the wine cellar. Carson sweated and frowned but knew he had no option and whispered in Lord Grantham’s ear that the house was out of stock!

Lord Grantham glared at him with a face like a Bulldog who has just had his favourite bone taken away. How could this OOS possibly happen? The offer of white wine was rebuffed as you simply cannot drink that with red meat. With simmering rage Lord Grantham apologised to the gathering and instructed Carson to break out the vintage port as a partial compensation. Even the ladies were allowed to drink the port; it was that serious!

Carson was embarrassed and sheepishly retreated to share his out of stock moment with Mrs. Hughes. The Abbey Supply Chain had failed and Carson felt deep, deep shame.

However, privately Carson was fuming that the guests had quaffed 3 days of red wine in one sitting so how on earth can you insert that kind of planning spike into accurate demand? As Mrs. Hughes calmed his anger the dreamy music started and another hectic day at the Abbey came to an end.

Tags: Customer service, Dave Jordan, Humour, Performance Improvement, Supply Chain, Forecasting & Demand Planning, Logistics Management, Inventory Management & Stock Control

RTM Logistics: Getting your “stuff” onto shelves for consumers to buy

Posted by Dave Jordan on Thu, Nov 15, 2012

You may well have another corporate buzz term for the getting your products onto shelves, into restaurants and into coolers but the title above is simple and succinct. You may use Route to Market, Go to Market or Distribution but they all have the same challenges and ultimate objective. The simplest internet definition I found was “Route To Market: The supply chain that a product follows to get to the final consumer”.

The final leg of what could be a lengthy global Supply Chain crossing oceans and mountain ranges is what can separate the women from the girls. If your product is not available for sale then it will not be purchased; cue dissatisfied consumer walking away with a competitor product. Grrrrr, irritating isn’t it?

Look back a few lines and you will see that Route To Market is part of a Supply Chain…….Think about that for a minute. The skills needed for moving the right stuff around at the right time and right cost are those to be found in logistics, planning, warehousing, transport etc. Why then, do companies leave this critical part of the chain to sales people?

You wouldn’t ask a plumber to repair your car or a ballet dancer to build a wall or a politician to run the country, would you? No, so why should you ask a sales person to manage this part of the Supply Chain? Call one of your sales colleagues and suggest you carry out the negation with Carrefour this year. Exactly, unlikely to happen and if you did manage to get in front of a Carrefour purchasing Rottweiler you would probably leave without your shirt.

If your products go into a Sales-led Distributor “black-hole” and you have poor performance in the Traditional Trade then you might consider getting some Supply Chain experience on the job. I am not suggesting you change your structure though personally I think this would be valuable. You will have people in your organisation with the right skills to move SKUs efficiently from Distributors and onto shelves, coolers etc so why not us them?

Route to Market, Go to Market or Distribution? How about changing the way you do things to “Win The Market”?

 

Improve Distribution Operations

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

Sales & Operational Planning (S&OP) : the CEO needs to get a grip

Posted by Dave Jordan on Tue, Nov 13, 2012

Make your S&OP process work for youPeople ask me what is it like working in Supply Chain and my usual reply is “wetting yourself in a dark suit. You get a warm feeling but nobody notices”. If everything is progressing well then at best you are ignored but when something goes wrong in supply you can bet someone is screaming in your face.

Yet, in my FMCG, Brewing, Pharmaceutical experience the fault commonly lies within the very departments exercising their vocal chords, i.e. Sales and Marketing. I have blogged on that previously so I will not dwell on the same theme here but needless to say making a lasting change to their blinkered approach is difficult.

Borrowing the opening words of the Beach Boys classic; “wouldn’t it be nice” if everyone focused their energy – positive or negative – into making collective progress? Instead of being dragged into an S&OP meeting people need to see this forum as one where tough debates can take place but joint decisions are made. Taking a team view of a supply problem to the Board is a powerful way of focusing the top team onto alternative opportunities.

The junior team has debated the problem to death and the top team needs to trust that this has happened with rigour and then move the company forward. Why is there so much backward looking going on? Whatever happened has happened so get over that fact and make the future less uncertain.

If CEOs and their Board colleagues continue to behave and operate as if they are 1 grade lower in the hierarchy then these companies are going nowhere. Implement S&OP properly in the first instance.

 I find many companies who proudly boast that they run a fluid S&OP when the reality is somewhat different. Take a look at you own situation; a really honest look:

  1. Do S&OP meetings happen at the right times?
  2. Are all relevant team members present every time?
  3. Are meeting minutes issued and actions completed in good time?
  4. Is the S&OP presentation to the Board fragmented or collective feedback, i.e. does anyone break ranks when at the Board S&OP meetings?
  5. Are KPIs displayed widely and do they reflect inter-dependent performance of all departments?

S&OP will not remove any structural or economy based barriers but following the discipline will ensure that what you can do is being done to the best of the collective ability of your employees.

The core of S&OP is that that the sum of the individual contributions is far, far greater than individual politics full of back-stabbing and backside protection.

Tags: Brewing & Beverages, FMCG, Dave Jordan, CEO, Performance Improvement, Pharma, S&OP, Forecasting & Demand Planning

FMCG 3PLP partnerships: A happy marriage? Avoid divorce.

Posted by Dave Jordan on Thu, Nov 01, 2012

Marriage is quite a project, isn’t it? You take a look at what is on the market and get to know a few possibilities. You may search for a long time to find the right partner who will sweep you off your feet and eventually carry you over the threshold of your first house. That could be a long way into the future as there are the inevitable set-backs and mismatches, e.g. she likes One Direction and you like Motorhead.

As relationships develop there are investments in drinks, dinner, after-pub snacks, cinema tickets and possibly “test” holidays. This is when you see the inevitable reality of the toilet seat being continually left up or the New York skyline of cosmetics blocking out the light from the bathroom window. Get through that and the family interrogation and you might actually make a choice of partner, get engaged and plan to marry.

Here is where the money starts to flow. Payment s for the church, flowers, cars, the wedding breakfast, the evening disco plus the cost of cleaning your car after your “mates” treated it to a shaving foam respray. You are making a huge personal and financial commitment on this project so let’s hope the partnership lasts as divorce is equally expensive and causes untold disruption.

Finding a logistics 3PLP is quite a project isn’t it? You see what is in the market and how well they are doing; who has capacity, capability in your sector, eg FMCG and the best credentials. When you have a short list you operate a tender process so all candidates have an equal and fair chance to become your preferred partner.

You make a selection and celebrate with drinks and dinner with the parents; sorry I mean senior 3PLP partners and then jointly plan the transfer of responsibilities to the new 3PLP provider. The new relationship gets off to a flying start but in many cases sooner or later the “toilet seat” effect arises. The 3PLP is not performing as well as you expected and your business is suffering.

Do you

  A) Immediately stop the contract and find someone else?
  B) Find a way forward to jointly improve performance?
  C) Do it yourself?

C is certainly a possibility to consider but after you have sent so much time and effort finding the partner and then getting to know each other you really should avoid the discontinuity a 3PLP change brings.

  1. Talk to each other at the right operational and senior levels.
  2. If you do not have a Service Level Agreement (SLA) within the contract, construct one.
  3. If you have an SLA are the correct KPI parameters being measured? Are expectations clear?
  4. Agree very clear improvement targets and timelines and monitor progress frequently.

The key requirement here is to have an SLA agreed before you start collaboration. Without this vital pre-nup you may end up flushing away a huge amount of time and money.

Getting to Grips with 3PLPs in CEE

Tags: Route to Market, Logistics Service Provider, Dave Jordan, Performance Improvement, Supply Chain, CEE, Logistics Management, RTM Assessment Tool, Outsourcing