Supply Chain Blog

Improve Supply Chain Performance via Total Productive Maintenance

Posted by Dave Jordan on Wed, Jun 25, 2014

When I first came across Total Productive Maintenance (TPM) I was sceptical of yet another ”blue sky” approach to pursuing manufacturing excellence. Surely, this would soon be replaced by the next set of buzz-word initials dreamed up by smart-suited consultants. But no; I saw the light and now I’m a believer (RIP Davy Jones) in this technique that originated in Japan.

If you have a factory that is running below par in terms of efficiency, output, reliability or cost etc then TPM could be the ideal tool to achieve a sustainable turnaround. Companies do not like under-performing factories and there is usually somewhere else they could make their products better, faster or cheaper. So, if your factory is under threat of closure you might consider following the TPM principles.

TPM is not rocket science but it requires just as much senior management buy-in and patience as an S&OP process demands. There are multiples levels of TPM success but even the basics will require a significant and sustainable change in behaviour. Kick off with the Kaizen 5S approach which is remarkably simple stuff.

Total Productive MaintenanceKaizen 5S is based on the translation of 5 Japanese words relating to systematic improvement and maintenance of a clean, efficient, well organised operation.

  1. Sort – Sort out what you really need – I mean really need! Throw out anything that has been hanging around for a few years “just in case”. Check out your spare parts store and see what items are held for equipment you no longer own!
  2. Straighten – Have you ever mislaid your car keys? This system creates a dedicated space for every tool or spare part located near to where it is needed.
  3. Scrub – Clean the machines and the production area thoroughly. Dust can affect quality, spills can be hazardous and well maintained equipment lasts longer.
  4. Standardise - If you use identical working practices for maintenance and cleaning your employees will become highly proficient. Standardisation provides you with a flexible workforce that can be deployed where needed and without a training period.
  5. Sustain – From the factory manager to the tea boy you must keep the faith and sustain every initiative. This is very difficult at first but you have to grit your teeth and keep going.

Of course, this is merely a snap-shot of what TPM entails but it shows the basic elements you need to start the journey. As mentioned, the first tentative steps can be painful but if you stay the course the benefits are immense in efficiency and employee satisfaction. The principles apply equally to logistic centres, offices; essentially everywhere people work.

Oh, but don’t try this at home or a divorce is highly probable, believe me!

Image credit: corbindavenport.blogspot.co.uk

Tags: FMCG, Dave Jordan, Performance Improvement, Manufacturing Footprint, Supply Chain, S&OP, Cost Reduction

FMCG Route To Market (RTM): Traditional Trade distributor interaction

Posted by Dave Jordan on Wed, Jun 18, 2014

SNCG_Traditional_Trade_DistributrionI am approaching end of tether time with some potential clients. If they were our clients then they would not have to endure the routine monthly disruption. Why do major FMCG producers always think they are in the right and their TT partners are always the source of all evil? The TT channel may well be relatively uninteresting in developed markets but in a majority of the globe the TT channel is often the only channel available.

Previously, I looked at big-name retailers were stealthily re-entering the TT channel with their launch of high street outlets such as Tesco Metro, Sainsbury’s local or Little Waitrose. These are effectively an attempt to relaunch the channel so in many boardrooms TT must be important. Why then is the scenario below played out on a monthly basis? 

FMCG_RTM_Distributor_Interaction

Click to see large image

If any of this sounds familiar then you are destroying value across the company and you are primarily responsible for failure to achieve results agreed with HQ. You would not be allowed to behave in this way with the key accounts so why do this with distributors?

There is no rocket science involved. Evaluate and improve your RTM network where required and then integrate distributor TT demand into your S&OP process. You do run S&OP, don’t you?

Image courtesy of franky242 at freedigitalphotos.netfreedigitalphotos.net

 

Tags: FMCG, Route to Market, Dave Jordan, S&OP, Sales, Distribution

Gartner Top 25 Supply Chains: Did your FMCG company make the list?

Posted by Dave Jordan on Wed, Jun 11, 2014

The annual Supply Chain “Oscar’s” have been announced by Gartner for 2014. I list the top 10 here but to see the full list of top 25 global Supply Chains please click and surf here.

  1. Apple
  2. McDonald's
  3. Amazon.com
  4. Unilever
  5. Procter & Gamble
  6. Samsung Electronics
  7. Cisco Systems
  8. Intel
  9. Colgate-Palmolive
  10. The Coca-Cola Company

Many of the usual suspects are present as you would imagine but what is very interesting for me is seeing Unilever in the top group after being as low as 21st in 2010. Keep up the good work boys and girls; my pension depends on you.

supply_chain_top_performers_2014I doubt any SC professional will get over-excited about being in the top 25 but what about those names that are not present? Some will have opted not to take part and others may be in the midst of huge change and could not be contenders in the assessment period. Also, I guess some people do not want to be at the top of the pile either as the expense to get there and stay there may not be their priority for investment. However, if your major competitors are on the top 25 list and you are well off the pace then surely that must be a problem.

The top 10 has four multi-national FMCG giants so the process of getting stuff onto supermarket shelves is clearly being done very well by some companies. So if we assume the science behind the assessment is sound there are a large number of companies doing something wrong or at least not nearly as good as others.

Electronics and computing related companies are well represented and they of all people will be exploiting the technology they have invented to optimise availability and speed of supply. Amazon is another interesting company in that it now acts as a Supply Chain company rather than a books/CD/DVD supplier. Their product range is huge and they are successful by having a very slick Supply Chain. You can buy a new dress from all sorts of places but possibly only Amazon will get it to your door the very next day at a fraction of the cost of that charged by couriers for a similar service.

What about McDonald’s fast “food” restaurants? You may know I am not a fan of their offerings but you cannot knock them for their success. The consumer pull on their burgers and fries or mici here in Romania, is very powerful and as long as everything is available when you approach the counter you will buy and be wished a nice day. They do not always get it right though as I noted a few months ago.

Not so long ago Supply Chains were considered to be just an annoying cost on the books but no so now. Those companies that have invested in Supply Chain people, processes and performance are clearly reaping the benefits.

Image courtesy of Stuart Miles at freedigitalphotos.net

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

World Cup in Brazil: Did it make it into your S&OP planning process?

Posted by Dave Jordan on Wed, Jun 04, 2014

The 2014 Football World Cup in Brazil is fast approaching, yes it is football not soccer. As a kid you played “footy” where I grew up and if you said anything like “soccy” you would need to be a fast runner. The England team has completed missing penalties practice, donned smart new suits and headed off to Miami to miss some more penalties.

Rather like Christmas, you start to see World Cup related merchandise earlier and earlier as producers try to ensure their drink/snack/sticker/game/whatever is top of mind with consumers.  

Brazil world cup football logo

Everything seems to be open for exploitation as a must-have for the tournament. The need for beer and TV watching snacks is understandable but does anybody really need/want a Word Cup table cloth with all the fixtures listed and spaces to complete the score lines? I know not everyone drinks beer while watching football but I have never heard anyone say “great game, I‘ll just put the kettle on for a brew of that Word Cup tea”. World Cup tea, what next World Cup Milk and Sugar and World Cup digestives? They are probably already out there somewhere.

The majority of items adorned with the World Cup logo are sensibly generic and not directly linked with any one team. You may recall the inventory chaos of the vuvuzelas in team colours at the previous competition in South Africa. However, when your can of fizz, bag of nuts or chocolate snack has the name of a team on the packaging then you take the risk of your team unexpectedly departing at the group stage leaving you with huge stocks of Costa Rica cola or Iranian ice cream.

Do producers really put enough thought in to the planning process or do they just throw as much promotional stock and advertising material out there in the hope that their efforts hit the mark? The event has been in the diary for several years and should have formed a key part of your S&OP process. The results of many FMCG and other sector companies may well rely on a productive World Cup sales period but for some reason many have treated the tournament as a special at which you can throw money and cause discontinuity in the supply chain.

Guess who has to clear up the mess when the last ball is kicked and the winners lift the trophy (Spain or Brazil for me although I obviously dream of English success) and football interest suddenly plummets for a few weeks at least? Leftover stocks will be discounted and sink markets will be drinking Brazil beer and eating Nigeria nuts all the way to Christmas. Post World Cup must be a dream for those companies that specialise in liquidating excess stock.

If you did not have the World Cup as a major element of your S&OP process then it is too late and unfortunately your results may now end up being flushed away in the WC!

Image courtesy of vectorolie at freedigitalphotos.net

Tags: FMCG, Dave Jordan, CEO, S&OP, Forecasting & Demand Planning, Inventory Management & Stock Control