Supply Chain Blog

FMCG: Performance turn-around needs fresh supply chain faces

Posted by Dave Jordan on Wed, Jul 29, 2015

In the greater scheme of life many questions remain unanswered but my hobby horse question is why people and notably politicians and usually male at that, cannot get on with other nationalities and/or/religions. We are not here for long yet some people spend their lives causing or being affected by conflict.

On a much less serious level my top 4 so far unanswerable questions are:

Why would anyone want to eat cucumber/castraveti?

Why do people wear headgear in hard top cars when they are not in F1 racing?

Why do obviously bald men think the Bobby Charlton careful combing technique turns you into a babe magnet?

Do you know? Well, this might not appear to be a seamless link but please bear with me for the 4th unanswered question.

Athletic Madrid is a famous football team playing in the Spanish League and located in the Basque region. Uniquely, they only recruit players who were born or trained in football in the greater Basque region of Spain and Southern France. On the face of it this provides quite a challenge as the number of potential recruits of the highest quality is severely restricted compared to other teams with a potentially global choice?

Nevertheless, Athletico has and continues to be extremely successful despite not being willing to bring in players from other countries and continents. Competing teams can sign who they can afford or bring in players on loan to fill a specific need or to strengthen the team as the various competitions draw to a cup winning closure.

Teams acknowledge that sometimes it is right to shake things up in the dressing room particularly when results are not going well. Buy somebody who plays in a different style or who has battled relegation previously or simply someone with a fresh approach that will add some sparkle. Athletico really is unique in terms of operating within the restriction of the Basque heritage and such an approach does not work in FMCG supply chains.

So, onto question 4.

Mr Einstein said “Insanity: doing the same thing over and over again and expecting different results.”

FMCG_Supply_Chain_Performance_ImprovementWhy do some FMCG companies insist on maintaining a strict internal recruitment and promotion policy even when the results are heading south and have been for a number of years? Surely something is screaming out for change and improvement yet the same old ideas and practises continue and guess what, with the same results! I find this within supply chains in many companies in many countries.

These are people – male and female – who are clearly hitch-hiking against the traffic

You are not constrained by the Athletico approach so freshen up your supply chain at least, by bringing in some fresh talent to shake up the status quo and generate the spark that can create sustainable change in the business. This is not to suggest the existing employees are not good enough but now and again you need a change of direction and even leadership in order to achieve the corporate objectives and beat the competition (don't get me started on Sepp Blatter!). Recruit someone “on loan” or on an interim contract and you might start winning trophies again.

(The cucumber question is doubly worrying when people say they actually enjoy the stuff!)

Image courtesy of taoty at freedigitalphotos.net

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

FMCG warehouse capacity in Romania: A Short Story

Posted by Dave Jordan on Wed, Jul 22, 2015

The car bounced over the dirt road of potholes and puddles and approached the expansive, looming warehouse building that was once so full of life and bustling activity. Paper and polystyrene fast–food litter gathered up by the breeze blew across the distribution centre parking area to be fought over by bony, mongrel dogs. A short time ago the yard would not be a place for an idle visitor as liveried juggernaut giants and ant-like fork lift trucks toiled away around the clock. Noise, dust, fumes, shouting, revving, the hiss of pneumatic brakes; no more.

Abandoned_Warehouse_Romania_CEEThe entrance to the office building was beyond the waiting room with its familiar mismatched furniture, faint smell of illicit smoke and the accompanying stale odour of tired drivers and their diesel machines. The constant tip-tap of fingers on keyboards generating loading and transport documents supporting someone’s Route To Market had long gone. No more chattering from the tractor printer feeding on green/white paper from a seemingly endless box below. No camaraderie, no arrangements for the weekend, no flirting, no telephones ringing; the only sound was the noticeably slowing tick-tock of the beer-branded plastic clock which in turn would slowly but surely grind to a halt at one precise second in time. The beige IKEA infrastructure unchanged from the last day of productive work.

The previously secure and “authorised personnel only” door into the storage area was propped open by a tightly rolled newspaper with the dusty headline recording the passage of a few years of hope-filled EU membership. Spitting cats scattered rapidly fearing the entrance of their fast-food chasing canine enemies. Dirty yellow fork-lift trucks sat huddled in one corner like juvenile play-ground gossips, connected to chargers that no longer dispensed energy. The once firm, shiny black seats repaired and renovated with stretch-film, tape and cardboard. Names scratched into the truck paint revealing the identities of the long gone jockeys.

No beeping, no screech of rubber and no ecstatic laughing when a pallet falls and spills its liquid SKU load. Once you could not see from one end of the building to the other as hundreds and thousands of cases, drums, IBCs and big bags filled the mega-Meccano skeleton. Now only the blue painted skeleton with orange boots remains taught and proud with the bumps and bruises of battle visible on the lower levels and a scattering of splintered wooden pallets, also blue.

The loading bays all had their shuttered mouths firmly closed to the outside world. Would they be ever be prised open again to receive and dispatch FMCG goods like foods, detergents, drinks and wine? For now the loading bays only received the attention of endlessly sweeping flocks of pigeons and what they generously leave behind.

The rusty padlock and chain were replaced with a dull clunk and the warehouse was empty again and for how long this time? The dogs chased the litter; the cats produced a litter and the pigeons left their telling statement on a once thriving warehouse in Romania.

 Image courtesy of artur84 at FreeDigitalPhotos.net

Tags: Brewing & Beverages, FMCG, Dave Jordan, Supply Chain, CEE

FMCG: ERP’s – how will you cope when yours fails?

Posted by Dave Jordan on Wed, Jul 15, 2015

Yes I know, the recent blog posts have been a little Blog Gold meets Classic Blog with a touch of All Our Yesterdays and the History Channel but here is a fresh new offering.

The last few months have been very busy both on the business and domestic fronts. The heiress has completed her Honours Degree in Fine Art so perhaps the annual student house move is a thing of the past. Business has seen me helping to improve the logistics operations of 2 regional FMCG companies based in North Africa and the far, Far East of Europe, almost in Asia actually.

During one of my UK trips I had a bit of a melt-down on communications for a variety of reasons and I needed to send some information urgently. No PC, no smart phone and certainly no scanner forced me to ask a question that made me feel old and backward in equal measure. In the Post Office I asked if I could use their fax machine!

The lady looked at me as if I had asked her to do something horribly illegal and then asked her senior colleague if they actually had a fax machine. This reminded me of the Not The 9 o’clock News sketch where Mel Smiths’ character enters an electrical store and asks for a “gramophone”. Click here to see the late, great Mel and the future Mr. Bean in action.

The Post Office fax machine was not even plugged and was very dusty having clearly not been used for some time. Despite this, my handwritten notes were despatched along the wire accompanied by the noise only people of a certain age will recognise. The noise that sounds like a cat being squeezed through a mangle while singing Bohemian Rhapsody – go and look mangle up on Wiki if you don’t know.

ERP_Supply_Chain_FMCG_work_aroundSo, job done and quite cheaply too as I was charged the price from when the machine was last used. Four pages transmitted for 3 groats; not bad eh?

Why am I telling you this tale of technological woe? Recently a major multi-national FMCG company celebrated 10 years use of their globally harmonised ERP system. Despite the complexity and lack of real technical knowledge in the originally hired consultancy the implementation had proven successful. Management by spread sheet was a thing of the past, all transactions were diligently recorded and performance KPI’s produced on a weekly basis.

Excellent! Well, it was excellent until the ERP suddenly ground to a halt unexpectedly and just before the quarter-end. No ERP exists without glitches and downtime for necessary patches and fixes but this was complexly unplanned and at a commercially sensitive time. The usual rush to ship out the month-end peak of sales was in full flow when the ERP stopped issuing invoices. No invoice = no shipment = no sale (= no sales bonuses!).

The ERP was clearly not going to run again until well into the following month so what to do? No problem, just type out the invoices using a PC or even handwrite them. Ok, so this might take longer and there maybe some errors but at the very least invoices will be issued, goods despatched and sales value accrued.

Or not actually! Nobody knew how to issue invoices manually. All the old heads had shuffled off into retirement leaving the company without the basic but necessary experience. Slick ERP’s are wonderful but if you do not have routinely tested fall-back options you will find yourself in trouble one day. You almost certainly have dummy fire drills and dummy product recalls so why isn’t this case with your critical business system?

High quality ERP’s remove the need and ultimately the capability of people to think. ERP operators input data, produce reports and monitor rather than have to make decisions. In fact, they are not allowed to make decisions and that can expose your business when the IT fails and it will.

Image courtesy of PANPOTE at freedigitalphotos.net

Tags: FMCG, Dave Jordan, ERP/SAP, Supply Chain, Sales