Supply Chain Blog

FMCG Supply Chain: The Top 10 Smash Hits (with a twist)

Posted by Dave Jordan on Wed, Mar 25, 2015

The worlds of Supply Chain and popular music may be strange bed fellows but if you look closely you will see many a smash hit have a supply chain theme. Let us take a tongue-in-cheek look at the latest Supply Chain charts.

I Want My ERP – Sting is at number 10 with his classic need for a decent ERP system to support your business. Avoid off the shelf solutions as they rarely work in the long run. Yes, you usually get what you pay for so evaluate carefully.

S.O.P  from Abba is at number 9 this week. You can almost hear the cry for your business to implement a fully functioning and inclusive Sales & Operational Planning process. Why don’t you hear what your staff are saying about S&OP because “when you’re gone, how can I even try to go on?”

FMCG SUPPLY CHAIN CHARTS  resized 600Suzi Quatro sits at number 8 with Can The Plan, i.e. exactly what you should not do. When you generate an agreed plan from the S&OP meeting and receive top management buy-in then stick with it! Multi- functional co-operation in planning to one set of numbers ensures you get the best chance of success.

Rightly ahead of Suzi at number 7 is Stand By Your Plan from Tammy Wynette.  For all the reasons above you should stick to your collective best estimate of what the business will achieve in the month. If any department starts to work to another plan you have simply lost control.

Hope Of Delivering by Paul McCartney is at 6 this week – yes, Macca is still hovering around in the charts. Take the “hope” out of your service proposition by choosing your 3PLP wisely or by investing in skilled in-house capability. At the end of the day your delivery company is the final contact with customers before a sale is secured and payment activated.

Little Eva is at 5 with the classic The Distri-bution. Everybody probably is “doin’ it” now but those that manage Distributors well will be topping the sales charts. Get close to your Distributors and integrate them into your business as far as possible. They are after all responsible for a major part of FMCG businesses operating in D&E markets.

It’s A Forecast – Bonny Tyler is at number 4. A forecast is just that, a forecast. While yours will never be 100% correct you should be constantly aiming to improve accuracy on an SKU basis. Forget forecasting by brand or category as this does not provide the detail required to allow the Supply Chain to make adjustments in the future. The forecast should be collaborative taking all aspects of supply, marketing, finance and demand into account.

Into the top 3 and at three is Barry Manilow with Co-packabana (At The).  Promotional complexity can be both a USP and a millstone. You may believe you operate with a small number of SKUs but this number balloons when you take into account all the promotional co-packing and re-packing that takes place. Take a long hard look at your level of sku complexity and consider delisting those that do not add value.

Dolly Parton sits at 2 with The Best Little Warehouse in Texas – Dolly certainly has a couple of big hits and this is one of them.  Organise your stock so you know where to find it and don’t’ forget to count it and count it regularly. You best laid plans can come unstuck if you cannot find your stock when trying to order pick.

I am Sale-ing – Rod Stewart is this weeks’ number one! Old croaky throat is still at the top with a song that sums up what your whole organisation should be aligned to achieve. Following the messages in the top 10 can help you secure sales success even under difficult economic conditions.

Tune in again soon for another look at the Supply Chain charts.

Image courtesy of James Barker at freedigitalphotos.net

Tags: FMCG, Dave Jordan, Humour, Supply Chain, S&OP, Sales

FMCG Supply Chain Language; What do we really mean?

Posted by Dave Jordan on Wed, Mar 18, 2015

If you are honest you have probably sat bored in an airport lounge waiting for your inevitably delayed flight and listened in on a conversation. Go on, admit it! If the discussion topic is not one with which you are familiar it can be as if you are listening to speech in a foreign language. Different businesses and functions within the same businesses use a variety of words and phrases to describe what they actually do and not all are obvious to outsiders.

FMCG HUMOUR SUPPLY CHAIN TERMS resized 600

Here I take a look at some classic supply chain-speak. Within the supply chain community we all know what is meant by the myriad of KPIs, disciplines, skills, terms etc but what might non-supply chain people actually hear and understand?

Supply Chain – Available in many link sizes, this is what Do It Yourself (DIY) and hardware stores do.

Buying Contracts – The volume of supermarket shopping reduces.

Call-off - Cancel or postpone a sports fixture or other event.

Line Efficiency - How quickly the queue moves in the Post Office.

Changeover Time – How long it takes to select another TV channel with a remote control.

Forecast – What weather presenters try and do but usually fail.

Forecast Accuracy – How good or otherwise are the presenters?

Forecast Bias – Regularly preferring one forecaster over another.

Case-fill – Done before leaving on a vacation or business trip.

Case Packer – The person who fills the above cases before travel.

Shrink-wrap – A physiatrists’ white coat.

Customer Service Levels – How many floors there are in the shopping mall.

Out of stock – No Knorr bouillon cubes in the kitchen.

Out of stocks – Released from mediaeval public humiliation device.

Order Fulfilment – Telephone request for home delivered take away food.

Pallet – A flat wooden holder artist’s use for painting.

Pallet Space – How much free space is left for more paint on the pallet.

Pallet Utilisation – How often you use this item for painting.

Spreadsheet – Used to protect carpets when painting and decorating.

Ok, that is enough as my tongue is pressing in my cheek. Many thanks for reading this far but you probably should go and do some work now.

Image courtesy of stockimages at freedigitalphotos.net

Tags: FMCG, Dave Jordan, Humour, Supply Chain

FMCG: 7 Reasons to engage an Interim Supply Chain Manager

Posted by Dave Jordan on Wed, Mar 11, 2015

The global recession rumbles on and on and on like Coronation Street – which will end first? Once again it is Greece holding out a cap for another IMF/EU bale out? Spain and others remain on the brink and France/Germany seem to be keeping their own Euro boats afloat by sinking Euro partners. Is that what baling out really means?

Which leads me to write on why Interim Management is a particular opportunity at present? Mainly as a result of the economic conditions, numerous companies have folded this year and a similar number have been taken over or merged with others and there is more of each to come, I fear. Obviously companies that go bust are too late to be helped although I am not sure too many actually sought professional help and guidance anyway.

Those operating companies and Private Equity (PE) players merging or buying in this period need to have their new businesses in good shape to ensure the ROI in the contract deal has a chance of coming to fruition. When the green shoots of recovery actually start looking like thriving shrubs, shareholders and PE owners will expect their pound (or Euro?) of flesh.

One route to accelerating and establishing integration and realignment is to use the services of an Interim Manager. Here are 7 reasons why hiring an Interim Manager (IM) can be of huge benefit to companies:

  1. Return On Investment. No, it is not more expensive than hiring full time (FTE) or temporary employees. Take all recruitment and employment costs into account and you will appreciate how efficient IM costs can be. You pay your employees for turning up for work whereas IM are paid against set objectives and delivery. (Consider the cost if you make the wrong choice of FTE and have to go through a lengthy, disruptive and expensive exit process.)

  2. Speed. Senior Interim Managers are readily available and located in CEE. You do not have to waste time going through a lengthy search and selection process with a fee-taking head-hunter followed by a training period.

  3. Expertise. Interim Managers are often seasoned professionals with deep operational experience. A vast majority will have successfully held senior roles in blue-chip organisations for long periods.  No training is required; you get a “vertical start-up”.
    FMCG interim management performance improvement
  4. Objectivity. Interim Managers are able to look at a given situation with a fresh set of eyes and will not be afraid of “treading on toes” or telling the boss there really is a better way!

  5. Accountability. Interim Managers are not there to advise. They are in place to handle a specific project or a department in transition. Unlike full time employees they are very comfortable at being rewarded (or not) based on black and white objective achievement.

  6. Effectiveness. Possibly the most obvious contribution of IM. Once the Board has given a mandate to carry out a task they will get on and do it without struggling through a bout of inertia. “Just Do It” sums this up nicely.

  7. Commitment. Interim Managers remuneration means they usually have a direct financial stake in the assignment. They are not there to make friends or pave the way for recruitment. They wish to do the job well, get paid and move onto the next challenge.

If you have a difficult job to be done within a defined timetable and you do not have the resources in-house you should consider the value an Interim Manager can bring both to yourself and your organisation. Gaze into the post-recession future and see what tough jobs need to be done now to ensure you are ahead of the game when the flowers finally bloom.

Interim Management Image courtesy of Enchange.com

Green shoots image courtesy graur codrin at freedigitalphotos.net

Tags: FMCG, Interim Management, CEO, Performance Improvement, Private Equity, Supply Chain

FMCG Supply Chain Consultants: A lot of Fiction & 1 Fact!

Posted by Dave Jordan on Wed, Mar 04, 2015

Some FMCG organisations are comfortable with the idea of using consultants while others avoid them like the plague. Having been on both sides of the fence with respect to supply chain consultancy services I can appreciate the pros and cons for each party. There is some truth but an awful lot of misconceptions deeply held on the subject and I thought I would look at what is fact and fiction, in my humble opinion!

1. They are very expensive.

Fiction. At the same experience level consultants will undoubtedly be cheaper than the full people cost (e.g. tax, insurance, pension contributions) of a full time employee. Perhaps fees sound a lot when expressed as a daily rate but in reality they are likely to be very competitive if you compare this against what your full time staff really cost the company.

2. They don’t know any more than we do.

Fiction. One of the benefits of consultancy is that you see a multitude of circumstances in very different companies, cultures and companies in a variety of sectors. The cumulative experience gained is something you are unlikely to find in long term employees in an organisation where the freedom to think outside of the box is not always welcome.

3. When they have gone everything reverts back to as it was.

Fiction.  Well, it certainly cab but only if you let it! Good consultants will ensure knowledge is transferred and thoroughly tested through one on one or team training before ending a project. Look for a consultant where skills transfer to clients is a priority.

FMCG Consultants fact fiction resized 6004. They always change things.

Fact. Enabling change is precisely the aim. You would not hire a consultant to maintain the status quo as you want something different to happen, e.g. lower costs, better processes and greater efficiency. Change is indeed often tough but an outsider leading this can take some of the “sting” away from line management.

5. They do “just enough” so they can return later and get paid to fix the problem again.

Fiction. The reputation of consultants can be easily destroyed through bad publicity whether deserved or otherwise. Sustainable improvements in supply chain performance get noticed and similarly, word gets around quickly if anyone is unprofessional. If you feel the need to call in consultants for a problem that has already been addressed then maybe your original choice was defective.

6. They are either just out of university and know nothing or they are pensioners.

Fiction. There is no perfect age to be a consultant but you do need a degree of experience before you can impart this to others. A 21 year old consultant in a very nice suit or smart skirt would indeed probably lack credibility but some companies insist on putting such resources forward to major clients.. Do not be afraid of a consultant at the other end of the age scale as they are often the most willing to share a wider range of experiences.

7. They only work a few hours a day (probably to dash off to the Post Office for their pension payment?)

Fiction. From personal experience I know this to be completely untrue. I have worked extremely long hours to get jobs done against tight timetables. Consultants only get paid for the days they work and clients rarely extend contracts so you have to get the job done by hook or by crook.

This is just a brief appraisal and there are many more pieces of fact and fiction that could be added. When I was on the other side of the fence I shared some of the negative views but I now appreciate the true reality and the value experienced consultants can bring to your business.

Ok, must stop now as the Post Office closes in half an hour, my hip is giving me trouble and I cannot find my zimmer frame.

Image courtesy of nongpimmy at freedigitalphotos.net

Tags: FMCG, Interim Management, Dave Jordan, CEO, Performance Improvement, Supply Chain