Supply Chain Blog

Customer Service: How to get it right and how to get it badly wrong

Posted by Dave Jordan on Wed, Aug 27, 2014

Just returned from a holiday in Spain. Thinking about it, our trips to UK do not really count as holidays as they inevitably involve moving heavy boxes up and downstairs as the heiress (click here for unashamed plug of heiress art work) changes address once more. This Spanish expedition did require a fair bit of luggage carrying as we took in a wedding at the same time so a number of pairs of shoes and dresses oh and one suit and tie, had to be taken.

Before we had set foot on a plane we had a problem. A naughty person has somehow found my credit card details and began spending money they didn’t have on the internet on my account. I noticed this criminal activity fairly quickly and after alerting the bank it then dawned on me that the cards of my wife and I were now cancelled just 48 hours before departure.

“Your call is important to us. Please stay on the line while we connect you.” Yes, a call to Customer Services was necessary. Any chance of getting a replacement card to me at a Spanish hotel address within the next few days? I was not expecting anything remotely positive but I was given assurances that a new card would be waiting at the hotel address on my arrival. Guess what? It was! Top Customer Service marks for that flexible friend.

Before getting the new card we experienced a travellers nightmare as the carousel grinds to a halt and one of your cases has not arrived. To be fair we have been lucky as the last time a case was misplaced was over 10 years ago. Nevertheless, the thought of wearing shorts and trainers to the wedding was not going down well with senior management. I had even less to wear.

On completing all the usual forms we were told the airline did not know where the bag was but it would be with us the following day – how could they know that? Sure enough, just while we were enjoying a drink and tapas to celebrate the arrival of the new credit card a courier arrived at the hotel to reunite us with our case.

customer_servcie_good_good_badOnce again, a positive Customer Service success and this time for an airline which might just be the most popular in Europe at present. On the return journey they even let us off with 16kg of excess baggage as they appreciated senior management had to refresh her wardrobe just in case the bag did not turn up.

Surely not three CS successes? No, of course not. The chance of a trifecta – look it up - was blown apart by an international car hire company. Hotels are increasingly charging for car parking or have even outsourced parking facilities and management to greedy Rottweilers with a huge numbers of registration plate cameras.

Thinking I had not paid for parking – I had and being a sad man I had all the receipts – they debited the car hire company for a 70 Euros penalty which they then passed on to me. The parking Rotweiller halves the fine if you pay within a few days and allows as appeal up to 28 days after the alleged offence. The car hire company only bothered to tell me about the penalty 50 days after the event and well after the appeals deadline. Many thanks to a car hire company that will remain nameless until I win! And I will.

Just as easy as it is for the credit card company and the airline to produce a good feeling and an inclination to future loyalty you can see how others really mess it up and will not be used again. The great Customer Service examples caused the companies to spend just a little time and money getting it right while the car hire company spent nothing and deserves less.

Image courtesy of Stuart Miles at freedigitalphotos.net

Tags: Customer service, FMCG, Dave Jordan, CEO, Humour, Supply Chain

FMCG RTM Distribution : How Traditional Trade interaction could work

Posted by Dave Jordan on Wed, Aug 20, 2014

I previously blogged about the reality of FMCG Traditional Trade (TT) Route To Market (RTM) distribution and described the drivers and behaviours in each party as the monthly plans inevitably imploded.  Let us now get out the crystal ball and stare into the mystic orb and dream how life could be if both producers and distributors really got their acts together.

FMCG Blog 200814 resized 600 

describe the imageI believe this is achievable but all parties have to work together closely, openly and with trust to make it happen. This will not happen overnight but a mutual programme of improvement with frequent training and coaching by subject matter experts will pay dividends.

At the end of the day both producers and distributors are trying to make a profit so why should getting your RTM to work efficiently be such a hurdle? If you will not accept your RTM network requires careful yet skilled management then your chances of success are like a man with no hands clutching at straws.

Image courtesy of Nutdanai Apikhomboonwaroot at freedigitalphotos.net

Tags: FMCG, Route to Market, Performance Improvement, Supply Chain, Traditional Trade, Sales, Distribution, RTM Assessment Tool

FMCG Stock Shrinkage happens in the best run operations, even yours!

Posted by Dave Jordan on Wed, Aug 13, 2014

My colleague Stefan Cucu recently wrote on the subject of stock shrinkage in coolers located in HORECA outlets in Romania. One of the points he made warned Supply Chain professionals about the likelihood of stock shrinkage anywhere along the chain.

The term “shrinkage” covers a multitude of incidents but all inevitably lead to missing stock, extra cost and ultimately, poor customer service. If you and your systems think stock is available and you provide a promise to customers then finding (or not finding) missing pieces/promotional premia/cases/shrink-wraps and even pallets will not leFMCG Stock Shrinkage Sources resized 600ad to a “Happy Bunny” situation.

Here I take a look at some of the common and some of the more unusual causes of stock shrinkage.

At the factory

Apart from getting the standard QC/QA checking spot on, factory personnel should have a close look at their rubbish. Any packaging that is wasted should be 100% destroyed and factories should think carefully about sending waste to anyone other than a very honest recycler. For example, any bottles that are potentially usable can be filled with water and swapped for filled bottles along the supply chain. Yes, I have seen this happen!

At the warehouse

A minefield full of potential shrinkage opportunities. Routine cycle counting will alert management to any variances and ensure stock available to promise is really available but you should adopt the “trust is good but check is better” approach. Ensure you have clear segregation of duties so no individual has the access and authority to book stock in AND out. Monitor the relationships between operators and security personnel and rotate security shifts to avoid any “comfortable arrangements”. Although it is a pain, I would also rotate third party security companies on a regular basis. Keep an eye on damage levels too as they can always be used to substitute for good stock when backs are turned.

In the delivery truck

Installation of tachographs and Sat Nav systems have helped to minimise shrinkage during delivery but where there is an ill will there is a way. Did the driver sign off on what was actually loaded? If not, there is the opportunity to stop and remove a few cases from the inside of pallets which is not immediately obvious to the naked eye. Keep an eye on Sat Nav routings and any unexplained idle time.

On the customers delivery dock

You may have reached thus far with 100% load integrity but you are far from safety and a signed 100% OTIF delivery note. On one notable occasion when I was a Supply Chain Director in the FMCG sector a certain big name retailer continually reported shortages. Now, nothing is ever 100% perfect but when they started complaining about non-receipt of full pallets I smelled a bit of a rodent. A personal close inspection of the unloading process saw the driver sent away to an inside office to get documents stamped. While he was away the customer dock operators calmly took 2 pallets from the load and hid them in a nearby electricity building. When the driver returned he was completely powerless and could do nothing but sign against a shortage.

In the retailer outlet

No, not finished yet! In addition to the RTM drinks cooler caper described by Stefan, shrinkage can occur in store and not just through shop-lifting adventures. If you do not attach your promotional premia to the host sku securely they will be removed. Unscrupulous retailers will “ramp” the free product or item thus destroying your FMCG promotional activity but increasing their revenue. If the item being promoted is not available in the same store, e.g. a pen, then you are simply giving it away to anyone with enough nerve to slide it into a pocket.

That is just a snap-shot of what can go wrong as the possibilities to shrink your top and bottom lines are endless.

Image courtesy of Stuart Miles at freedigitalphotos.net freedigitalphotos.net

Tags: Customer service, Brewing & Beverages, FMCG, Dave Jordan, Performance Improvement, Supply Chain, Logistics Management, Inventory Management & Stock Control

Supply Chain Insight: FMCG Drinks Stock Shrinkage

Posted by Stefan Cucu on Wed, Aug 06, 2014

Today we see a lot of writing about Supply Chain. Technology is advancing rapidly and we are seeing changes almost on a daily basis; progress is simply enormous. However, some things never change and this is what I discuss here – things that never change.

I am not going to tell you about anything difficult. What I mentioned above is as old as humanity but all too often forgotten. True, such things are not usually directly addressed by our business as they relate to common sense only but as we know, common sense is not that common! Of course, I can only approach this from a personal perspective as everyone is entitled to their own opinion.

Today's Topic: "Yeah man, we steal here!"

This is without any doubt one of the most powerful insights that I have been offered in my Supply Chain consultant career. Once upon a time, when I accompanied a sales rep on his route in a Route-to-Market (RTM) project, I visited a certain street in the southern Romania district of Giurgiu. The day was beautiful, the sun was shining and spring had finally arrived. I do not remember how many stores we had already visited, it was a typically busy day in multi-distributor RTM project. Despite the technology progression I mentioned earlier we had printed forms to complete as PC Tablets were still too expensive. I felt that, apart from the spring-like weather, the day would turn outquite boring.

The sales agent was visibly annoyed by me, as I marked several x’s and far fewer stars on my printed forms. He was wondering, what on earth do keep scribbling there? Well, I said, I have to write down whether I find any products in the refrigerator that are from the competition or even a different sector. “Aha, let me take you somewhere that you will remember for your whole life”, he said. And he was correct, I still remember to this day.

FMCG STOCK SHRINKAGE THEFT resized 600We went to one of the HORECA outlets, essentially a pub which was very crowded and full of people, noise and smoke. The pub also had a cooler provided by the sales agents company. Do believe me, that refrigerator was the most beautiful thing I had seen throughout the project. It was flawless, arranged exactly as it needed to be, with the premium and expensive products nicely placed on the top shelf at eye level, the products which his company tried so hard to sell and promote. In the cooler there was no trace of competition; excellent, this was simply divine. I would have gladly taken a “selfie” with the cooler and post it on Facebook but I figured out a tiny problem - a huge padlock.

Nobody could use the cooler. Was it just for decoration? The agile waitress was very busy, serving the customers by bringing them their selected beverages from the back room. At first, she did not understand what the long-face guy wanted from her (it was I, obviously baffled), but then exclaimed, “Well, I tell you, I can’t even leave the cooler open for ten seconds, the customers will steal everything”. Right, so it is, confirmed the agent, these guys steal everything!

Then something incredible happened: the buzz in the room stopped, like in old films the piano stopped playing and everyone was looking at me. A customer from a neighbouring table wearing a nice sailor T-shirt, showed me his broken and blackened teeth in a large, no, huge smile and exclaimed “Yeah man, we steal here!” Then obviously, everyone started laughing. And they laughed…

Half joking? Half serious? This is a warning to those who operate in traditional trade HORECA outlets – your products are being stolen or at least permanently borrowed!

While these drinkers were every honest about their dishonesty it is likely this is happening along the Supply Chain. A Supply Chain Manager surely needs to know the technical stuff but they also have to have a nose to sniff out where shrinkage is occurring.

Whether you signed a contract that can bring you personal benefits, no matter how large these benefits are, whether you favour suppliers or clients for reasons known by you only, or whether the stocks simply disappear from the company's warehouse - this is still called theft and eventually someone has to pay for it. Moreover, as a Supply Chain Manager you should be the first to know that something is going wrong and certainly before the Controlling or Audit department and certainly before any external legal involvement.

ERP, WMS, TPS, or BI, APO, MRP and the rest are excellent systems and procedures but they all fail if the phrase applies which my good old sailor friend from Giurgiu enunciated so well: we steal here!

Sometimes it’s that simple why you are losing stock and suffering expensive stock counts!

Image courtesy of chanpipat at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Stefan Cucu, Traditional Trade, RTM Assessment Tool, Inventory Management & Stock Control