Supply Chain Blog

Leading Edge S&OP: Periodically check for relevance & compliance

Posted by Dave Jordan on Wed, Feb 26, 2014

As a sign of how long we have spent living in Romania we have adopted the Domestos si harnici si darnici or spring cleaning routine. The first target of this spring was the kitchen. All cupboards and drawers were emptied including some for the first time in several years. Lo and behold we had forgotten we were the “proud” owners of an item recently voted the world’s worst labour saving device. Yes, we own a battery operated revolving ice cream cone. Add this to the ice cream scoop that announces “ice cream here” in a very American accent and you can perhaps appreciate the challenge ahead.

Everything came out this year including the built-in cooker and the fridge-freezer. Even when empty the fridge-freezer was difficult to move out of the kitchen but after much pushing and pulling it was reconnected to power in the temporary home in the living room. That is when we noticed that the tiles where the fridge-freezer had been were different to those in the rest of the kitchen. That was rather strange. Why would the builder put different tiles in only 1 very small area? Did he/she run out of tiles and put in what was available or was it simply a mistake spotted in time before the whole kitchen was tiled?

S&OP compliance kitchen resized 600Neither. Closer inspection revealed that the mystery tiles were in fact exactly the same design but significantly brighter! (I hope senor management does not follow this blog!) The tiles that had been hiding under the fridge-freezer for so long were bright and with a shine while those elsewhere looked rather tired. I am not suggesting the darker tiles were dirty but they had simply been exposed to so much traffic over the years that their sheen had faded and any gloss finish that was there originally had vanished.

Can you see where I am going yet? That Sales & Operational Planning (S&OP) process you implemented in 2005 may not be in the same condition as it was when Enchange left the building. Furthermore, that original design may not be wholly fit for purpose!

To ensure your S&OP still fits the bill take a look at our top 5 questions on ensuring continued relevance and compliance:

1.      1. Do the meetings still take place and are they minuted and with clearly defined actions?

2.      2. Are the correct people at the appropriate seniority level involved in the preparatory meetings and the Board S&OP meetings?

3.      3. Are the KPI’s still relevant for the stage and state of the current business? Perhaps stock levels are not now the key issue but it may now be customer service.

4.      4. Are the KPI targets stretching enough? Is your business actually cruising while measuring yourself against soft targets?

5.      5. Is S&OP the ONLY process used across the company for defining sales and operations capabilities on a monthly basis? Have underground spreadsheets emerged to undermine the ERP?

Have you tried to play a 7 inch vinyl record on a CD player? Do you still wear that day glow pink teeny-weeny bikini you bought at college? (I am thinking of the ladies here but you never know!) Is your mobile phone still the size of a house brick?

With the exception of any cross-dressers out there the answer will be “no”. Everything and everyone changes with time and so do supply chains and S&OP processes. From time to time you need to stand back and check if the tools you are using are still the best for the job. You would expect me to say this but that relevance and compliance check is best done by an external body which by the nature of their own business is up to date with S&OP/IBP development and innovations.

Take a look underneath the veneer of your S&OP process and assess if non-compliance is the cause of your stale sales.

Image courtesy of artur84 at freedigitalphoto.net


Tags: FMCG, Dave Jordan, CEO, ERP/SAP, Supply Chain, S&OP

FMCG Supply Chain IT : ERP and WMS – use it or lose it Mr CEO!

Posted by Dave Jordan on Wed, Feb 19, 2014

In a development similar to buying your first colour TV (yes my dear daughter, we watched black & white telly) or the first microwave cooker, I have finally bought a Smartphone. This is a significant step as my previous sets have all been robust, no nonsense sensible equipment which could probably survive a nuclear attack. The new telephone has a huge screen and the sales lady in the Vodafone shop told me it had the latest hemorrhoid operating system and piles of apps, or something like that anyway.

CEO Supply Chain IT resized 600Now I can access the internet, use Skype, check my email, see where I am on a map, store files in the cloud and even call people. Tapping numbers on a screen rather than depressing buttons is very new to me and this is providing an unexpected hazard. After ending a call I find that I inadvertently activate call-back dialing when I place the telephone in my pocket. While I am blissfully unaware other people and children in particular can hear my wife shouting “Dave, Dave you’ve done it again, stop calling me back”. The innocent and confused children ask “Mummy, why is there a girly voice coming from that man’s trousers?”

While I have so much extra functionality at my fingertips I doubt I will progress much past looking at the football scores on the internet. To be honest this is likely to be the situation until our daughter returns from university and shows me what to do.

All that technology, functionality and connectivity simply wasted. No, not me and the new Smartphone but you Mr. CEO; you and your Supply Chain IT purchases. In global companies there is usually a corporate IT buying strategy that all units have to adopt without argument and without the ability to “localise” the offering. Smaller companies can have more flexibility in their choice of IT supplier and they could and should certainly receive a bespoke solution tailored to their specific needs.

Yet last week I was surprised to see FMCG company XYZ had purchased various SAP modules including APO but had failed to install the software. Similarly, a new WMS was sitting in a virtual shiny box on the bookshelf. When you think about it, that is quite an investment which has not returned even 0.01% of the purchase price.  Why would you do this? Your employees are struggling along with an ERP that Noah rejected for its lack of numeracy power and Excel files the size of a small village. And guess what? Your in-market performance is continuing to slide down into an abyss from where even Bear Grylls could not escape.

Take the cellophane off the boxes and get your software installed before both your career and the IT become obsolete. Call me if you need any help.

By the way, I have purchased the same Smartphone for my wife. Be afraid children, be very afraid!

Image courtesy of anankkml at freedigitalphotos.net freedigitalphotos.net

 


 

Tags: Dave Jordan, CEO, Telecoms, WMS, ERP/SAP

FMCG S&OP : Stopping or even pausing the process makes no sense!

Posted by Dave Jordan on Wed, Feb 12, 2014

I’m not sure if it is the way people were taught to drive or the driving conditions in certain countries but some drivers do have a funny technique, in my humble opinion. I do not claim to be an expert driver and frankly after driving in Saudi Arabia and then Romania on the wrong side of the road for 21 years I am far from the best judge of driving competence.

You are in traffic which is moving at a constant speed which usually demands a constant pressure on the accelerator or gas – really, why gas?  - pedal to keep moving along. (NB Gas = “The state of matter distinguished from the solid and liquid states by relatively low density and viscosity” – enough said). However, this certain style of driving involves constantly taking the foot off and then putting it on the accelerator again and again and again. You start rhythmically rocking backwards and forwards against the tension of the seat belt, soon realising what it feels like to be a pair of furry dice.

That cannot be doing much good for the engine or the shoe heels.

I do not have a decent segue here but bear with me as all will become clear shortly. Domestic central heating. 

Winter has finally arrived in Bucharest and along with much snow the temperatures have been negative double digit, i.e. a little bit chilly. Consequently, the gas – not a liquid – has been burning in abundance to keep the house nice and toasty. There are two schools of thought on this one. Do you leave you heating on all day with the boiler switching itself on/off as the thermostat setting is reached or do switch the heating off when you are out of the house?

Contrary to the stop-start driving technique I actually favour the on-all-day approach particularly if the house is well insulated. Otherwise, when you come in from work in a very cold climate you have to crank up the boiler and burn, burn, burn for some time until you can face taking your coat off. The boiler relaxes all day before being placed under stress and strain in an instant.

S&OP CEO FMCG Process pauseThis leads me to my astonishing moment of the week. An FMCG company took the bold step to implement a rigorous Sales & Operational Planning (S&OP) process in a business going nowhere fast. After a few months of implementation pressure and pain they finally saw the light and the world changed. Suddenly, Trigger (RIP Roger) was calling Dave, Rodney. Baldrick actually did have a viable cunning plan and herds of wildebeest were seen sweeping majestically across Torquay beach.

Imagine my surprise when I make a compliance visit this week and the CEO tells me, “We are not doing S&OP this month, time for a break”! My jaw dropped. My coffee cup rattled and my brain was busy sending syntax errors back and forth. Why would you make this decision? When S&OP has made such a visible, massive change in your business efficiency why would you take your foot off the, ok I’ll say it once, gas pedal? Why break the momentum built up over many months? Why would you allow indiscipline to even raise its ugly head after achieving so much?

Did you hear about the rugby prop forward who suddenly decided not to push in the scrum?

Did you see Usian Bolt storm out of the blocks only to stop for a look around after 50m? (Before you shout, yes he would probably win anyway.)

This company may well remain in the top three in the sector but I am absolutely sure the number 1 position will remain a dream.

Image courtesy of Stuart Miles at freedigitalphotos.net

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

Communication & more communication gives S&OP a fighting chance

Posted by Dave Jordan on Wed, Feb 05, 2014

Ok, here we go again on another merry-go-round of Supply Chain stretch, strife, strain but hopefully success.

All the decorations should be back in their boxes by now. The lights where the red set doesn’t flash and the white set that only work when you bend the plastic coated wire in two and stick it with tape - fix them before next year? No, I doubt it too. The Father Christmas toilet seat cover - what do you mean you don’t have one? – has been returned to its protective bag in the loft which makes everyone feel a lot more comfortable in the bathroom. Father Christmas always sees what you are doing, remember…..

So how did your season of goodwill go? What about the company Christmas party?  Such events are usually good for morale and a laugh even well into the following year. Who danced with the young blond/e receptionist – choose your own gender here? Why did the electrician and the canteen lady leave rather early? Who asked the DJ to pay The Lambada again and again and again? All will be revealed in vending machine gossip in the coming months.

S&OP communication resized 600You get a decent glimpse of your company reality when different departments ask for separate Christmas party events and this is compounded only by your agreement to the request. Ok, if you have your various functions in all corners of the country or even globe then local events are obviously cost effective. By the same score if you employ thousands of staff you are not going to find a venue large enough within a reasonable budget. However, isn’t it sad that some smaller organisations allow each department to skulk off and do their own things?

Small groups of people quaffing the foaming ale, alco-pops and fizzy wine inevitably results in a slow but sure eruption of their pent-up tensions about colleagues. Gossip, criticism and bitterness all escalating to the depressing bass beat of Do They Know It’s Christmas?.  What if you could harness all that energy behind your Sales & Operations Planning  (S&OP) process and persuade people to “prove colleagues right” rather than highlight failings?

All your initiatives to improve sales and supply chain performance within S&OP are bound to fail if people do not communicate or communicate negatively. How many times do you see employees having a real conversation with a colleague? A rarity in my view – as rare as an honest politician. People are usually concerned with their own similarly unhelpful politics and protecting their own backsides and departments rather than doing what is best for the company.

You can have the biggest budgets, the best supporting IT systems, brilliant brands, stunning marketing but if your people are communicating negatively or not at all then any attempt to grow your business with the aid of S&OP is doomed to failure. Futile!

CEO's should get this sorted out before the lights go dim on their own careers!

Image courtesy of David Castillo Dominici at freedigitalphotos.net

Tags: Christmas, Dave Jordan, CEO, Supply Chain, S&OP, Sales