Supply Chain Blog

FMCG Company Board : Santa delivers their Christmas gifts

Posted by Dave Jordan on Mon, Dec 22, 2014

Christmas is coming, the goose is getting fat and you might want to put a penny or even a Euro in an old man’s hat. Once again it is nearly time for a cynical Supply Chain Santa to distribute presents to the FMCG/Brewing/Pharmaceutical Board directors. Have they all been good this year? What does cynical Santa have on his sleigh for each of you?

Santa presents S&OP resized 600After dashing through the snow, cynical Santa arrives at the first house in a very trendy part of town. Who lives here? Yes, this is the very swish bungalow (think about that for a second) of the marketing director decorated with over 10,000 flashing lights. Squeezing down the chimney and out through the fireplace Santa finds himself in a warm, brightly lit room with a large stocking hanging on the door handle. Without making a noise, Santa opened his vast sack and took out 3 presents to leave in the marketing stocking:

An alarm clock that activates between 07.00 and 08.00 and cannot be re-set.

A wooden cabinet for displaying advertising agency corporate gifts.

A rolling 12 month Sasco wall chart calendar for activity planning – yeah, right!

Santa closed his sack tightly and climbed back up the chimney where Rudolph was ready to take him to his next destination. A short flight took them to a very neat area with houses all the same size and neatly arranged in regimented rows with postage stamp sized lawns.

With a larger chimney pot Santa was quickly inside the house and in a pleasant room with a fish tank bubbling away in the corner. Santa wasted no time in reaching into his sack and left three gifts for the Finance Director:

A huge external hard drive to hold the multiple Excel forecast files.

An automatic bean counting device – ok, a calculator.

A spend restrictor for the marketing budget, ie a taser.

Up and away once again over the snow topped building, Santa flew to the really posh part of town. A very large house with 2 chimneys, a swimming pool and a boat in the driveway? This must be the CEO’s house but no, the Sales Director lives here.

Santa chose a chimney to wriggle down and entered a large room with beautiful furniture and all the latest electrical gadgets and appliances. What could you give to the Sales Director who has everything?

A mirror to look him/herself in the eyes after making a forecast.

An alphabet that does not stop at “I”.

The Guinness Book of excuses for failure to make the target.

After exiting via the second chimney in the room where the walls were covered in training course certificates, cynical Santa snapped the reigns and headed off into the icy cold sky.

Next stop was in an old part of town near to the industrial area. A ancient Citroen 2CV was on the drive and with solar panels across the roof of this address, Rudolf had to be careful not to cause any damage. A sign on the chimney listed a number of safety precautions and duly noting them, Santa slipped inside and soon had the presents neatly inserted in the Supply Chain Director’s stocking:

A crystal ball.

A warehouse with Tardis capability.

A full size artificial thick skin with a specially reinforced back to repel knives.

Leaving a pro-forma invoice with the presents Santa signed himself out of the house in the visitors log book and took to the sky once more.

Flying low across the rooftops Rudolph brought the sleigh to a halt in a part of town where every single house was exactly the same size, shape and beige in colour. Every house had cars that were beige and signs on the front doors telling a whole host of people and occupations not to knock or ring the doorbell.

As Santa was not yet on the forbidden list, he slid down the chimney and into the house of the HR Director. Working quickly as the dark of night slowly ebbed away, Santa dipped into the sack and left his presents:

A book, “Make yourself redundant and see how you feel”.

Another book, “How to erode terms and conditions by stealth”.

A massive ball of beige wool to pull over eyes.

Leaving in good time before any restructuring was suggested, Santa climbed aboard the sleigh once more and Rudolph took him to his final destination before daylight cracked open on another Christmas Day.

Christmas S&OP Sleigh resized 600That final destination was the house where the CEO, partner and 2.5 children lived. This was a house not as large as the Sales Director but clearly comfortable and reflecting the seniority of the role. One last time Santa forced his way down the chimney and dropped in to the fortunately cold fire place. After a difficult year Santa left the CEO three gifts:

A prayer book.

A headhunter website subscription.

S&OP from Enchange – this would make the previous two obsolete, of course.

With all presents delivered, cynical Santa and red-nosed Rudolph took the sleigh back to the Christmas grotto garage where the elves prepared it for long term storage. 

Do you think everyone will be happy with their presents? I think the Supply Chain Director might be but then again I am just a little biased!

Enjoy!

Santa photo courtesy of stockimages at freedigitalphotos.net

Sleigh photo courtesy of suphakit73 at freedigitalphotos.net

 

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

An FMCG Supply Chain Christmas Story

Posted by Dave Jordan on Thu, Dec 18, 2014

Xmas treeEbenezer Bruise is a miserly, cold-hearted FMCG CEO, who continues to berate his Supply Chain people even as Christmas approaches. As far as Bruise is concerned every problem in the company is caused by Supply Chain. He rejects a Christmas dinner invitation by muttering under his breath that the food would not arrive on time, the meat would be pigeon instead of turkey ad it will all probably be out of date. In the entire company his is the only desk free of Christmas cards and decoration but full of corporate gifts he has kept to himself.

This is a person who does not like the last quarter and particularly the year-end. Bruise knocks over snowmen and even boos when he passes the charity brass bands collecting money in the snowy street. His favourite past time appears to be shouting at his overworked Supply Chain Director, Bob Planit. Bob has been a loyal employee for reasons nobody seems to understand.

That night after putting his three-legged cat outside for the night in the sub-zero conditions, Ebenezer Bruise climbs into his bed to sleep. Ordinary people may count sheep to get to sleep but Bruise counts the number of people he has dismissed from the company during the year. When he reaches three figures he falls into a deep sleep while snoring like a pneumatic drill digging into rock-hard concrete. During the night, Bruise’s former Sales Director Jake Barley, dead for seven years, visits him in the form of a ghost. Barley's spirit has been in suspended turmoil since he died one day before payment of his annual bonus as punishment for being consumed with working in a Sales silo and sniping at other departments, especially Supply Chain. Barley has come to warn Bruise and provide the opportunity of saving him from the very same fate. The warnings will be delivered on time, in full by three visiting spirits.

Bruise falls asleep into snoring oblivion once again but wakes up to find the Ghost Of Supply Chain Past, a small, elderly man not unlike Mr Bean. The Bean-like ghost uses his I-Pad 6 to show Bruise scenes from history that follow Bruise's career development from a young boy with a clutch of A-level certificates. The scene shows Bruise, lonely but with the potential for happiness, as a young man with the first traces of ignorance and ambition that would deny love and real friendship in his life. Surprisingly, Bruise shows tearful emotion when studying the images and seeing his former self. An indication of the effect this spirit was having was that Bruise had not cried since school when he sat on a chair full of drawing pins in the Physics lab. The collective guffaw of the class still fresh in his mind.

Bruise returns to his pneumatic sleep and almost immediately he is awakened by the Ghost Of Supply Chain Present. This spirit has but a fleeting time on earth and quickly shows Bruise several local scenes of Christmas joy and charity. Then, with a slide of a spiritual finger down the I-Pad screen shows him a view of the Planit household. The ghost informs Bruise that unless the future is changed, the Planit’s crippled yet good-hearted young colleague and lodger, Jolly Tall will die from stress and overeating carbohydrates in an impoverished diet. Finally, ragged boy and girl misty figures float out from beneath the ghost's robes. The ghost introduces them as Ignorance and Ambition and warns Bruise to beware of both in equal measure.

Again; back to deep sleep but not for long. The quiet, black-clad Ghost Of Supply Chain Yet To Come takes the place of the other ghost. The Alice Cooper-like figure shows Bruise several scenes of people discussing someone's dismissal yet no one seems upset by the departure. Indeed, every single person in the vision seems overjoyed and happy with the news. Bruise does not yet realise the identity of the unfortunate person. He learns that Jolly Tall has sadly died after developing pneumonia through a hole in his shoe rather from the expected mal-nutrition. Bruise finally discovers that he is the one who has been dismissed and whose departure has only pleased people. Through misty eyes Bruise pleads that these scenes of the future can be altered and vows to incorporate the lessons of the past, present and future ghosts into his adoption of the Supply Chain Christmas spirit.

Bruise wakes up back in his bed and realises that the whole adventure took only one night and it is now Christmas Day. The snow is falling and Noddy Holder and Slade can heard bashing out their 1970’s Christmas anthem in the distance. Wrapping up well, Bruise brings the cat inside to thaw and walks into the town. On his way to the office he smiles and shakes hands with everyone he sees, bringing startled looks upon their faces.

He sends a large turkey to the Planit family, gives a sizable donation to the charity worker he previously insulted and has a wonderful time at Fred's party. The next day he gives Planit a pay rise! Bruise continues his kindly ways after Christmas, befriending everyone and becoming a second father to Jolly Tall, who does not die due to a hole in the sole. He never sees the ghosts again, but he keeps the spirit of Christmas and Supply Chain alive in his heart as well as anyone.

Image credit: HikingArtist.com

Tags: Christmas, Dave Jordan, CEO, Humour, Supply Chain, Forecasting & Demand Planning

FMCG Route To Market: Traditional Trade Distributor Signals

Posted by Dave Jordan on Tue, Dec 16, 2014

We have invested in a new waste bin for the kitchen. Even with our strict regime of recycling as much waste as possible that small flip-up bin inside a cupboard just was not big enough. Yes, the lid dutifully popped up when the cupboard door was opened but usually this simply confirmed there was no more room in the bin.

Our new bin is a highly polished stainless steel tube of almost 1 metre in height and can get us through a few days before capacity is reached and a trip to the wheelie bin in the garden is necessary. It is up market too with a system that automatically opens the top of the bin whenever you approach with kitchen rubbish; that’s a bin with a proactive customer service ethic.

In other news. Senior Management and I prefer a pitch black bedroom. This is all well and good until I have to get up early and stumble across the floor and fumble for the bedroom door handle. If this is after a few pints of the foaming ale then I often switch the dog off and let the intruder alarm outside into the garden. On reaching the kitchen I switch on the lights....and the posh new bin 3 metres away as the crow flies and around a corner opens its gaping mouth waiting for rubbish.

FMCG_TT_DISTRIBUTOR_SIGNALSWhy does it do that? This is not meant to happen. The lights are standard bulbs so there is not even an invisible spike from a fluorescent tube starter motor floating around the room. Why is our posh new state of the art waste bin getting a signal to open up and prepare to swallow our daily trash? Even in my slowly improving fuzzy headed state I have no rubbish I need to deposit in the shining tube. The bin is reacting to a signal of some sort but it is producing an action that is not helpful or appropriate.

Where have I seen that before so many times? Let me think about that for about half a millisecond, yes your FMCG Traditional Trade (TT) Route To Market (RTM). You the producer and your exclusive TT distributor partners are trying to achieve the same objective of selling more of your brands. The relationship should not be competitive or one largely based on negative, backward looking penalisation which will do anything but raise your sales.

Let us briefly look at five signals that TT distributors send out and how they are (mis)understood within FMCG producers.

Information Signal

 

Typical Response

A Better Response

Sales running rate unlikely to meet monthly target.

Draft the penalty debit note.

What is the problem, what else can we do together?

Key SKUs are approaching out of stock.

Tell the distributor to improve forecast accuracy.

Oh, an opportunity. Can we get more stock to the distributor?

The promotion is not going as well as expected.

What are they doing wrong?

What are we doing wrong?

There is a new competitor product launch.

Oh, really? Too late to do anything about that now.

Let’s activate a very rapid spoiler promotion.

I have some ideas how we can grow the business.

Yeah, right!

You are closer to the market so let’s hear those ideas.

There are many, many more examples where producers either misunderstand or misinterpret the data and information emanating from TT distributor networks.

A little more care in this area will help to ensure your sales are not a complete load of rubbish.

Image courtesy of Franky242 at freedigitalphotos.net

 

Tags: FMCG, Route to Market, Dave Jordan, CEO, Supply Chain, Traditional Trade, Distribution

FMCG CEO 2014 Letter to Santa Claus (aka Father Christmas)

Posted by Dave Jordan on Thu, Dec 11, 2014

FMCG/Brewing/Pharma CEO Letter to Santa ClausDear Santa,

I have been a very good FMCG CEO this year, I promise. If you want, you can check with my shareholders. They know how good I have been this year. Apart from the out of stocks of course, oh and the little mistake where we had to write stock off and waste lots of our money. But that is not so bad is it? Other CEOs were naughty last year and they still got what they wanted from you.

I had better be honest because you will know if I am not telling the truth. We also had a problem starting S&OP and so our planning, forecast accuracy and sales were not very good. They were not really big problems so I hope you can forget about them this time, please. Next year I promise to be better, I do, honest.

I forgot about the Route To Market (RTM) mess we had in the peak sales months but that really was not my fault. I promise to do something about RTM next year and make sure it works properly so people who buy our products are not disappointed again. I know it is bad when people come to buy our products and then spend their money on something else. I will talk to our distributors and Enchange and find out what we need to do.

I know, I know, when the new ERP computer system was switched on we were not really ready for the change but we did make it better as fast as possible. I did not think we needed any outside help for the new IT but I admit I was wrong. Next time I will get it right, hopefully without having any lost sales.

The factory thing was not my fault, I think. The factory man promised me lots of product but his machines kept breaking down at the wrong times and we had to wait for the fixing men to arrive. They took ages to get the machines working again and they broke down again and again. No, it is not a very reliable factory.

Does the warehouse problem count as well? We could not find our products when we wanted them and then when we did find them they were old and out of date and of no use to us. This was very sad but it will not happen again next year, I hope.

I have just read my message again to make sure I did not spell any words wrong and I see I was not as good as I thought. Actually, after reading this I am going to the chimney to take my stocking down and put it away in the Christmas storage box. I will try again next year, Santa.

Bye bye and Happy Christmas.

CEO

Image credit: HikingArtist.com

Tags: Route to Market, Christmas, Logistics Service Provider, Dave Jordan, CEO, Humour, Performance Improvement, Traditional Trade, S&OP, Sales, Inventory Management & Stock Control

FMCG CEO Gift: Implement S&OP this Christmas – Slade style.

Posted by Dave Jordan on Tue, Dec 09, 2014

Christmas is coming around quickly so who better than Noddy Holder and Slade to suggest you give a Sales & Operational Planning (S&OP) process to your business as a present. This Christmas song has been heard at Christmas every year since 1973! If you don't know the tune then click here for the original non-S&OP version.

1 2 3 4.......

Are you looking at your sales chart on the wall? Sales and Operational Planning
Is it the time you have to stop the fall?
You’ve tried overpaying salesmen,
You’ve loaded up the trade
Do you need to find a better way?

Chorus:
So here it is S&OP
Everybody should run one
Look to the future; how?
Six months or even 1.

Are you guessing how much you’re going to sell?
Are you suffering high out of stock as well?
Does supply chain always tell you, pre-SOP is best?
So why not work together for a test?

Chorus:
So here it is S&OP
Everybody should run one
Look to the future; how?
Six months or even 1.

What will the salesmen do
When they see their targets being met?
Ah ah
They’ll be changing the chart gradient on the wall.
Not for them will sales fall and fall.
When you implement S&OP you make quite a change
Looking back the old way will feel so strange.

Chorus:
So here it is S&OP
Everybody should run one
Look to the future ;  how?
Six months or even 1.

Noddy knows best so why not find out about S&OP right now and give your business the perfect gift.

Tags: FMCG, Christmas, Dave Jordan, CEO, Humour, S&OP, Forecasting & Demand Planning

RTM: An FMCG Distributor Is For Life: Not Just For Christmas

Posted by Dave Jordan on Thu, Dec 04, 2014

Ok, so maybe not for life but FMCG Distributors will have a significant impact on your sales performance, probably your personal bonus and therefore your CEO career! How have you treated them this year? Were they the usual pain in the proverbial - failing to achieve targets, not paying on time, always moaning about trading terms? Of course, some Distributors really do fit this stereotype but others are keenly trying to be treated as and to be, equal partners in your business success.

How are things going in Q4? Have you fallen into the “sales bonus push” trapYear end stock clearance FMCG breaking all the sales phasing rules you have been trying to drum into Distributors? Did you strictly maintain discipline on Sales & Operational Planning or did the last quarter deteriorate into a “sell whatever we've got” scenario?

Companies that spend time and effort in proactively guiding their Distributors and providing relevant training and support inevitably succeed in the market place. Yes, at the end of the day they have to stand on their own two feet but so many FMCG companies assume an organisation calling itself an “FMCG Distributor” knows how to support any specific business.

If you do not pay attention to the Traditional Trade (TT) Distribution side of your business then you are asking for trouble and that trouble usually ends in divorce along with all the discontinuity baggage separation brings. You need to avoid your choice of Distributors becoming like the English Premier League where managers get about 5 minutes to make an impact before being shown the door. (Strange though, that all these football managerial failures usually find another job.)

So, as we approach a special time of the year why not think about your Distributors and ask yourself if you have given them a fair crack of the whip?  If not, then you might consider a New Year resolution to develop mutual success rather than continually highlighting deficiencies and using backward looking KPIs to bash them on the head.

Sit down with your Distributors regularly, evaluate their strengths and weaknesses and agree to do something about the latter. Simply running through a Route To Market evaluation together can work wonders in establishing trust and cooperation. Do yourself a favour and do this now before Q1 next year also becomes history.

Click on the link below and go!

CTA RTM Free Download resized 600

Image courtesy of stock.xchnge at freeimages.com


Tags: FMCG, Route to Market, Dave Jordan, CEO, Performance Improvement, Supply Chain, S&OP, Distribution

(FMCG) Friendly Man Carrying Gifts & (RTM) Reindeer To Market

Posted by Dave Jordan on Tue, Dec 02, 2014
Client:   
Santa Claus aka Father Christmas, Kris Kringle, St Nick
Market: Most of the World
Scope:
Reindeer To Market (RTM) Distribution
Deliverable: Evaluation of RTM against sector benchmarks

Summary of Evaluation

Click here to enlargeMagnifying Glass

 RTM reindeer to market

The project delivered:

  • A detailed evaluation of the Christmas RTM deployment highlighting strengths and weaknesses.
  • A grading of each core element in terms of capability to deliver the presents in compariosn to benchmarks.
  • A framework development plan for parents and Santa Claus.
  • A clear business case for the continuation of Christmas.

Santa FMCG Christmas resized 600We would like to thank Mr. Claus for allowing us the opportunity to evaluate this important Reindeer To Market network. The network is in very good condition and we wish him every success on the 25th December.

Need help with your RTM deployment? Click here and we will give you a call.

Santa image courtesy of stock images at freedigitalphotos.net

The full assessment tool includes 10 individual elements and this can be found HERE.

Other seasonal yo ho ho posts:


Tags: FMCG, Route to Market, Christmas, Dave Jordan, Pharma, Traditional Trade, Distribution, RTM Assessment Tool