Supply Chain Blog

Paws for thought: FMCG Inventory Shrinkage and Control

Posted by Dave Jordan on Wed, May 29, 2013

Do you find yellow dog biscuits stuffed in your window frames?

Well, I’d expect such occurrences to be as rare as a squirrel with a nut allergy but I find it all the time. The house in Romania has mosquito nets on the windows as the summers are rather hot and the little blighters bite with pure human hatred.  The nets slide up and down between 2 small, vertical brushes on either side of the window to make them impregnable to blood seeking buzzers.

Within these brushes is where I find yellow dog biscuits. Not brown or red or any other colour, only yellow canine munchies. You might presume that our half Jack Russell-half Mr. Bean dog Mr. Patch is responsible. Is he hiding them away for a sneaky midday or midnight snack? Does he know about some impending global dog chow shortage? I doubt Mr. Patch is the culprit as some of these windows are 7 metres off the ground and our dog is yet to work out how to find and climb a ladder and then put the ladder away.

FMCG Stock inventory controlSo, how do the biscuits find their way into my window frames? Not surprisingly perhaps, the biscuit thieves are birds; magpies to be exact. I guess they are storing up for a rainy day or winter or some other event. They are known to be attracted by shiny objects but I cannot see the connection with a fairly bland crunchy snack. Also, as Mr. Patch eats inside the house they cannot be my/his biscuits so the magpies are stealing them from another poor dog in the area.

The house has many windows so the amount of stolen food is quite high and as I now regularly clear out the stash the amount really starts to add up.  Some pooch somewhere is not getting his or her full share to eat. That poor dogs’ human probably thinks their poodle is really content and eating well when in fact a magpie is regularly taking the yellow biscuits away. Of course, maybe the poodle doesn’t like the yellow ones but as dogs see in black and white and seem to eat anything I doubt this is the case.

Ok, what do we have here and what is this to do with Supply Chain? This is what is happening:

1.      1. The Supply Chain is not secure as stock shrinkage is occurring on an almost daily basis and nobody appears to notice.

2.      2. Stock is in the wrong location to serve the needs of the intended customers and consumers. When you have stock in the wrong places you will inevitably develop an overstock in your Producer network.

3.      3. Consumer demand is artificially high resulting in over-stocking and unnecessary spend along the chain.

4.      4. Ultimately, the consumer is receiving poor Customer Service.

About the only aspect impressive in this is the quality of the logistics in getting the stolen biscuits from a dog bowl into my window frames. I will keep a look out for any stolen jewellry but I fear I will only have biscuits to clear away.

Image courtesy of bplanet at freedigitalphotos.net

Tags: FMCG, Logistica Management, Dave Jordan, Supply Chain, Inventory Management & Stock Control

FMCG/Pharma IT: The Supply Chain of the Future?

Posted by Dave Jordan on Thu, May 23, 2013

Do you agree that Supply Chains seem to evolve very, very slowly? I cannot recall any major ground-breaking innovation in recent times. Yes, we have had bar-coding, RFID and S&OP etc but nothing that sticks out as significant or a major leap forward. Is there a revolution around the corner? Will Producers continue to make small incremental steps or will someone take the industry by the scruff of the neck and drag Supply Chain kicking and screaming into a brave new world.

I have dusted off my crystal ball and after a bit of gazing I saw a version of the future through the swirling mist.

Consumers

Rightly, consumers drive the largest change by buying exclusively on line as premium pricing applies to shopping in stores. Petrol will cost around 25 Euros per litre so driving will be prohibitive any way.

Advance consumer purchase demand accumulated by “Cloud IKAs” and automatically fed to brand owners SC IT.

Manufacturing

Today’s big name Multi-National Companies (MNC’s) will not own manufacturing assets. Products will be produced by versatile 3rd party factories in an automated supply support network.

Few people involved in the entire process and that sadly for those currently working in Supply Chains, is a recurring theme.

Factories will have seamless automated supply of RM/PM to mixers and machines without man handling. Not a “just in time” approach but “right on time” on each at each and every stage of the process.

Automated changeovers will maximise asset utlisation and output efficiency leading to lower and controlled product costing.

Late post dosing/late differentiation will be perfected to further streamline manufacturing  and provide supply agility.

Where no quarantine is required there will not be any intermediate factory storage of finished goods as produce to order is in place.

Planning

No people. Repeat, no people involved. Simply, SC IT analysing, collecting and accumulating consumer driven demand signals and allocating supply requirements on the manufacturing network.

Supply Chain Future ImprovementsDeliver

High quality “Super 4PLPs” will deliver around the clock to retailer picking platforms and not necessarily to stores.

Some PLPs will offer order assembly to cut out a stage and deliver directly to consumer’s homes or workplaces.

Fuel and time efficiency will be gained from having trucks filled with goods from all suppliers and products from compatible industries. (Always puzzled me this one. Producers keep goods apart apparently as long as possible yet you get Knorr mixed with Signal and Lipton next to meat in the back of store warehouse, shopping baskets and in the car. Although some items like tea will indeed soak up flavours and fragrances I think producers are far too cautious.)

Route To Market (RTM)

In Developing & Emerging (D&E) markets D&E the Traditional Trade (TT) will still exist as the prime method of getting products in front of consumers. In TT there will be a small number of distributors per country or region acting solely as 3PLPs and moving competing products.

Increasingly, the key players in your Supply Chain will be found in your IT department!

As the mist slowly clears once again I stop playing Nostradamus and put the crystal ball back in its box.

Image courtesy of Salvatore Vuono at freedigitalphotos.net

Tags: FMCG, Route to Market, Dave Jordan, Performance Improvement, Manufacturing Footprint, Forecasting & Demand Planning

FMCG/Pharma Customer Service: Ensuring Producer Value For Money

Posted by Dave Jordan on Tue, May 21, 2013

You have completed your weekly shop at one of the well-known International Key Accounts (IKA). Pushing your trolley around the well stocked aisles you selected what you needed and piled up the goodies. A full trolley this week as there were several very attractive offers including 2-for-1 on Easter eggs after chocolate producers got their forecasts wrong again.

Customer Service FMCG IKANow for the usual gamble. You cannot go down the 10 items basket-only route as that would be rude so which queue do you select? Do you go for the shortest line or do you play the tactics of how many items are in baskets and trolleys ahead of you? Does the check-out employee operate speedily or are they prone to chat? You eventually select a lane and inevitably it goes slower than all others. C’est la vie. Finally, you reach the front of the queue and your turn arrives.

Ok, hold that image for a while as I wander around and I will get back to it later.

I have needed a few spare parts around the house this week and searched on the internet to get the best deals. However, there were so many variations of the parts I needed that I decided to fill out two online forms requesting assistance from competing companies – in Romanian language I might add! Within an hour I had 2 email responses and 1 company actually phoned me to make sure I had what I wanted. I am in Romania and this is not usually what I experienced so I was pleasantly surprised.

Problem number 1 solved but then I needed to replace a garden gate and repair a set of steps. The web search revealed many options as you might expect. Feeling buoyed by my earlier online experience I sent enquiry forms off to a few companies. To date, not one has replied. These companies are not small one man bands and have obviously invested in a website and in other advertising to get their brands well known.

These companies are paying people to source, plan, make, deliver and sell yet they cannot respond to fairly simple requests. What a waste of time and effort? I have my cash ready and for some reason they don’t want me to buy their products.

Now let us move back to your IKA check-out queue experience. You are unloading your goods onto the conveyor just as the person in front takes their receipt and change and walks off to trundle the trolley to the car park. Your shopping moves slowly towards the edge of the conveyor until it automatically stops. After the usual exchange of pleasantries the check-out assistant says “I’m not going to sell these items to you” before walking off ignoring your pleas.

All that customer (IKA) and consumer time, effort and money has simply gone to waste. Perhaps more importantly, Customer Service at its very worst.

Image courtesy of renjith krishnan at freedigitalphotos.net

Tags: Customer service, Brewing & Beverages, FMCG, Dave Jordan, Performance Improvement, Supply Chain

Trouble brewing or has the extended beer Supply Chain lost its fizz?

Posted by Dave Jordan on Thu, May 16, 2013

During the summer months I am partial to a pint of the foaming ale with a solid, woody name like Woods Quaff served from a hand-pulled pump. Add a bag of pork scratchings and a village green cricket match and there you have what would approach the perfect afternoon. However, I live in Romania where there is actually more cricket than you might think and a lot less of the foaming ale. Yes, one or two of the big International Key Accounts have started to sell imported bottled beers from UK but to me it is not the same as watching a creamy froth develop on the top of a dark, mysterious brew drawn from a pump.

I guess it is part of growing up as real ale was not for me as a youngster and it was considered an old man-chunky sweater drink for bearded types, mostly blokes. Cider was the popular drink and then this developed into less fizzy lager where we had the never to be forgotten “Hofmeister – Follow The Bear” advertising. The people who made that advert up had obviously been enjoying far too much Hofmeister although it might just catch on in Romania.

Beer brewing FMCG Supply ChainDuring the widely reported Easter UK trip to see the heiress the weather was far from warm but I looked forward to sampling a few beers. The first place of expectant imbibement was the Horseshoe Inn in Downend near our mortgage where I scanned a small range of ales amongst the fizz. Seeing a new name I ordered a pint only to be told the barrel had “gone” and they did not have any more.

Next stop on tour was Wirral to see my football team lose once more and catch up with family. One dining venue was the Old Quay in Parkgate which is a picturesque “seaside” promenade but with lapping water only twice per year. I think this is the place I saw Old Speckled Hen on draught for the first time and so eagerly ordered one.  After a bout of foamy splitter-splatter the pump packed up and another out of stock was recorded.

Moving on to Birmingham next where the heiress is doing her best to minimise her inheritance and the same thing happened at a pub strangely named Country Girl in Selly Oak.  Finally, even at the fast food end of the market in Frankie & Benny’s my selection of a draft Boddingtons was met with another OOS response. My first and hopefully last "out of Boddies" experience.

In all cases I chose something else as a thirst has to be slaked even in chilly UK. Was I just unlucky or does this reflect a worrying level of forecast accuracy and/or customer service in the UK brewing industry Route To Market (RTM) deployment. The outlets did not lose out financially but ultimately the individual brewers did not receive my hard earned cash.

I know I am a sample of one but let’s hope they get their act together for the arrival of the world’s best drinks salesman, i.e. summer – if UK gets one!

Image courtesy of George Stojkovic at freedigitalphotos.com

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

FMCG S&OP implementation & compliance: MNC's & regional players

Posted by Dave Jordan on Tue, May 14, 2013

Increasingly, most multinational FMCG/Brewing/Pharmaceutical companies have implemented some form of Sales & Operational Planning (S&OP) or further integrated planning. They will have gone through the undoubted pain of getting people together to communicate for the good of the company and not just individual departments. Asking people to change the way they have been working, i.e. in silos, for years and having meaning and collaborative discussions is a very difficult task.

Other smaller and possibly regional players are yet to take the plunge despite the obvious benefits that continue to be generated in the larger operations. As mentioned above, the adoption of a robust S&OP does indeed take some effort particularly if the Sales and Marketing departments are lacking in structure and rigour which sadly, is usually the case. However, the longer there is a lack of planning rigour related to sales and marketing activities affecting product supply, undoubtedly the harder it is to make the S&OP mentality change.

S&OP Maturity Supply Chain Getting the meeting structure in place is hard enough as contributors have to have fixed dates in their diaries for months ahead. The sequence of inter-related meetings cannot stop or be significantly adjusted as the whole S&OP process is then out of kilter. Such discipline does not come easy but you have a chance if the top team and particularly the CEO/MD understands what S&OP is and is seen to be a very visible leader of the process. After all, the success of S&OP and ultimately the sales generated impacts heavily on her/his career prospects.

So, in such cases with smaller companies the equation is:

S&OP Education + CEO/MD understanding and buy-in = Success

Going back to the multinational situation, once S&OP is established is that the end of the matter? A resounding “no” is the answer in increasing numbers of companies. The pain of implementation has eased and the consultants or in-house project managers have cleared their desks. Project ROI has been calculated and the pay-back has been very swift indeed. Market performance is growing and the team seems a lot happier with their lot. What can go wrong?

Firstly, competition will always increase and improve so the efficiency and maturity of your S&OP must be constantly challenged or your once-formula 1 process could actually be well back on the grand prix starting grid. In order to avoid salami-like slippage the buzz word for the larger companies is compliance. Employees can get bored with the necessarily endless and repeated meetings and slackness and short cuts can creep in. If you have an ERP even the dreaded Excel spreadsheet may have made a comeback!

Assessing your S&OP performance and compliance internally is difficult and seldom provides you with a crystal clear picture. Get this done by an external company with deep knowledge of S&OP and more importantly, awareness of how other companies are succeeding with new and improved S&OP tools and techniques.

Image courtesy of Stuart Miles at Freedigitalphotos.net

Tags: Dave Jordan, CEO, Performance Improvement, S&OP, Forecasting & Demand Planning, Compliance

Fergie Out: Moyes In – FMCG SKU Complexity......

Posted by Dave Jordan on Mon, May 13, 2013

This latest blog is unashamedly about football or soccer depending on where you live, but with a Supply Chain related theme. If football -the correct term, actually – is not your cup of steaming Lipton then thanks for clicking and see you next time.

A week is a long time in football but one thing David Moyes will not be doing when he strides into Old Trafford on 1 July will be enabling much change.  Apart from his lack of silverware lifting success the similarities with the outgoing Sir Alex are obvious in style, focus, steely-eyed sternness and not least, nationality. The heritage in place at Manchester United will not allow Moyes to make any significant adjustments to the way the club works and why should he? Multiple trophies over 26 years suggest that something good must be going on at the Theatre of Dreams.

However, Man United may well be Premier League Champions once more but a little tinkering with their skus, sorry I mean players may be prudent. Even the most successful product ranges need refreshment from time to time as some skus perform better than others.

Take Rooney W, for example. For over 8 years he has been the dynamic, goal getting centre forward and probably name number 1 on the team sheet. However, a new sku in Robin van Persie was launched for the 2012-13 season and he has arguably performed to a far higher quality than expected for his first year on the product range. RvP has quickly established himself at the top of the Pareto pile and is firmly in the upper quartile of high performing skus. Wazza (aka Rooney) is certainly not in the upper quartile any longer.

Two new skus on the Man U range could result from M&A activity by Moyes at his former club Everton. The Everton midfielder Felliani is bound to be a target for a switch and as he has actually areadly moved house to Manchester means this might happen sooner rather than later. Felliani is the man who appears about 3m tall due to the size of his afro.  Felliani could certainly strengthen the Man U midfield with some hair-raising performances and what a shame the famous Fergie Hair Dryer will not be available any longer.

FMCG SKU AssessmentThen there is Mr. Baines who is also follically-challenged but in a very 1960’s early Beatles mop-head fashion. Without doubt Baines is the best left back sku in the Premier League and certainly amongst the English contingent which is actually in a minority now. The addition of Baines who is already in the upper performance quartile would surely soon have the Old Trafford crowd singing “I love you yeah, yeah, yeah”.

Every team needs to continually refresh - even Man U - and progress to be successful and this is the same for your FMCG sku range. If you have not looked at it for some time you can bet your life you will find it is a little hairy.

Image courtesy of artu84 at freedigitalphotos.com

Tags: SKU, Dave Jordan, Performance Improvement, Supply Chain

Enchange RTM Fix-It Utilities 10 Professional for FMCG & Pharma

Posted by Dave Jordan on Wed, May 08, 2013

Is your Route To Market (RTM) network sluggish? Does your system frequently stall and cause frustration? Sales performance not going to plan? Competitors streaking ahead of you? Is your boss at Corporate HQ giving you a rough time? What can you do?

You need Enchange RTM Fix-It Utilities 10 Professional. This latest edition brings you the following features:

  • Fix Problems & Speed Up Your RTM
  • Customer Data Registry Cleaner
  • Stop RTM Crashes & Freezes
  • Repair RTM Network Errors
  • Complete RTM Maintenance
  • Defragment & Refresh Your Distributor Network
  • Optimise Corporate Memory
  • Fix RTM Stock Security Flaws
  • Analyse & Reduce Out Of Stock Incidents
  • Fine Tune Order Capture Data
  • Total Top & Bottom Line Protection

 RTM FixIt Box resized 600

Not only does Enchange RTM Fix-It Utilities 10 Professional repair RTM problems, it also gives users a better understanding of how Distributor Networks actually work with detailed, easy-to-read analysis results and data. Choose a 1-click Assess All option or easily choose from the list below to gain more detailed insights on selected target areas.

  • Strategy & Structure
  •  Producer – Distributor Relationship
  •  Demand Management     
  •  Inventory & Delivery Management
  • Warehousing & Logistics
  • Sales Management
  • Order Management
  • Finance & Business Planning
  • IT & Data Management
  • Performance & Reward

RTM Fix-It Utilities 10 Professional also comes with a new module to activate and then measure the benefit of incorporation of Distributor activity within the Producer S&OP process. Think about that; one smooth process delivering your product right into consumers’ hands.

A key part of any Route To Market (RTM) strategy is determination of how the key RTM activities shown in the above list are managed in order to add the greatest value to the Producer, the customers of the Producer and ultimately the paying consumers. A Producer has a number of options with respect to these key activities as depicted in the example below.

Route to Market

Why not contact Enchange to take a 2 week Walk Through trial now at very low cost? Alternatively, if you are already convinced about the value of the Enchange RTM Fix-It Utilities 10 Professional then a 2-3 month deep-dive assessment and repair can be yours. Call now on +44 1403 275 576 or send an email to [email protected]

Act now to secure the latest edition of Enchange RTM Fix-It Utilities 10 Professional and reveal the full potential of your RTM deployment.

Images Courtesy of Nora Sebok at Enchange.com

Tags: FMCG, Route to Market, Dave Jordan, CEO, Performance Improvement, Pharma, Sales, RTM Assessment Tool

Enchange Publishes New Free to Download S&OP e-Book

Posted by Dave Jordan on Thu, May 02, 2013

Whether your deployment of Sales & Operational Planning (S&OP) is as solid as a fine old Cheddar or is more like Emmental, you will benefit from This new free e-book. The Enchange S&OP e-book tells you what S&OP is, does, how it works and how to evaluate the efficiency of your deployment. As ever, there is always a little fun included so we bet you will be singing along to our very own S&OP song very soon.

S&OP E-book

You can download the  free Enchange S&OP e-book HERE.

Visit our website for more resources on everything Supply Chain.

Click to complete our contact form and send us a comment or a question.

Enchange – Improving Supply Chains everyday!

 

Image courtesy of renjith krishnan at Freedigitalphotos.net

Tags: Dave Jordan, CEO, Performance Improvement, S&OP, Forecasting & Demand Planning, Sales, Integrated Business Planning

Marathon v Snickers: How fast is your FMCG Supply Chain?

Posted by Dave Jordan on Thu, May 02, 2013

For people of a certain age from the UK the high calorie, nutty chocolate bar in a brown-blue-yellow wrapper made by Mars Inc will always be a Marathon (before you ask, the USA Marathon was a Curly-Wurly type product). Snickers just does not work for me and I support campaigns to get the Marathon name reinstated. Snickers may well have been the name of a favoured horse of the Mars Inc owning family but for a chocolate bar? Snickers sounds a bit Benny Hill giggly-girly-underwear mixed with Mutley from Dick Dastardly.

Supply Chain speed & agilityThe annual Virgin London Snickers race does not work, does it? Would you watch a Dustin Hoffman film called Snickers Man? After running 26 miles plus 385 yards would you want to be known as the Olympic Snickers champion?  Was the 490BC battle between the Athenians and the Persians known as the Battle of Snickers? No, the whole point about a Marathon was that the bar took an age to eat as you chewed through nougat, the chocolate and the thick, sticky nutty caramel mixture. The day the Marathon name disappeared from the shelves in Mr. Roby’s sweet shop on the corner of The Wiend in Tranmere was almost as traumatic as the day I retired my hair comb.

Running a marathon has never been on my list of things to do and probably never will be.  Running such huge distance with monotonous pace in all sorts of weather is not my idea of fun even if I ran dressed in a large prawn outfit. I liken a marathon to the way some companies still operate their Supply Chains.

  1. Inflexible
  2. Slow.
  3. Unresponsive.
  4. Long lead times and….
  5. Too many people involved; chaotic at times.

Did you know that the world record for completing the marathon distance has only improved by 2 minutes since 2002? Whereas the men’s 100m record has improved by 0.2 seconds over the same period. Proportionally, the shorter race has seen a greater improvement in time. I accept that the marathon is not run so often and the course difficulty varies but I still find this significant; the faster you are the more opportunity you have to improve. That sounds about right too.

Developing this further, the 4 x 100m relay is probably the ideal race to compare against your Supply Chain.

  1. Fast, really fast.
  2. Direct.
  3. Agile.
  4. Collaborative teamwork; slick communication.
  5. Small team with each member knowing their own roles.

Is your Supply Chain plodding along with the speed and agility of a giant prawn or are you a champion sprinter?

Image courtesy of sippakorn at freedigitalphotos.net

Tags: FMCG, Dave Jordan, Performance Improvement, Supply Chain