Supply Chain Blog

FMCG Supply Chain: Do you use data or information?

Posted by Dave Jordan on Thu, Aug 27, 2015

Who coined “Big Data”? How did we get there without normal sized data, slightly larger data, chubby data and bordering on big data? People working in or associated with Supply Chains seem obsessed by data yet data itself actually tells you nothing. Really, not a lot apart from the fact that something is being measured or calculated.

Firstly, a couple of information irritations. If you need to renew your UK passport (must be similar for other countries) you need to have your identity confirmed by someone in a certain profession, e.g. doctor, teacher etc and be a person of “good standing in their community”. The allowed list of professions includes Bank Officials which baffles me these days. Anyway, the signatory has to provide information confirming your identification and you get the passport. Information not data gets the job done.

My bank writes to me – note, sends me a letter – asking me to confirm my address! “If you know where I live why do I have to call you to confirm what you already know?” TINA as Maggie would say, there is no alternative so you have to bite your tongue and provide the information.

 sc-data-analysisIn Supply Chains the data obsession is growing. “Show me the data. How does the latest data look? Will the data protect my backside?” Data is only valuable if you know what it is measuring, what it actually means and what you need to do to change or influence an aspect of business performance. For data to be useful it must be converted into useful information and then into appropriate actions.

Someone is shouting “data is information isn’t it”? Well, no it is not and as Michael Caine insists he did not say “not a lot of people know that”.

Due to some poor forward planning by the travel department you find yourself airborne for the duration of a vital end of season relegation encounter. On leaving the plane you ask an airport worker about the big game. All he/she can tell you is that there were 4 goals scored. Is that helpful?

Certainly, the match sounds like it was entertaining but your overpaid wimpy soccer idols needed a win. The data you have been given is 100% accurate but it does not actually tell you anything about the outcome. Was it 2-2, 3-1, 1-3 or even 4-0/0-4?

When you understand the final result was 3-1 in favour of your wimps you are elated and think about kissing the moustachioed guy at security but back down just in time – that metal detector sausage could cause some damage. Instead of being as sick as a parrot you are over the moon, y’know what I mean?

You have converted the raw data into information and then into actions. In terms of actions this means you have wisely decided against kissing the Village People lookalike security guard in order to head off to quaff several pints of the foaming ale. When you only had the 4 goal data you had no idea what of the outcome.

Image courtesy of Stuart Miles at freedigitalphotos.net

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

FMCG Drinks Route to Market – let’s get fizzical in CEE

Posted by Dave Jordan on Wed, Aug 19, 2015

In a past life I ran the Supply Chain for an FMCG company in the 6 Gulf Co-Operation Council (GCC) countries plus Yemen in the Middle East. The Distribution model was one different legal entity per territory even for the largest market of Saudi Arabia. Within the smaller markets there tended to be one or two stock holding points which were enough to meet demand in a reasonably short Supply Chain. KSA on the other hand had stock holding points in a majority of the larger population centres.

Moving stock around Saudi Arabia as demand fluctuated was often a simple call between the Supply Chain team and the distributor first point of contact. The distributor owned the stock of course and could do as he pleased but this interaction allowed for optimum internal customer service and timely production and replenishment from the factories. This provided a degree of advance warning outside of the formal forecasting system which was very welcome.

As confidence and cooperation progressed, this flexible replenishment process was expanded to cover cross-border assistance. For example, shortages in Bahrain were quickly erased by stock transfer with appropriate paperwork from the distributor in Dammam. This was not a substitute for good integrated business planning with the distributors but when lost sales became a real possibility all opportunities were considered. Sensible stuff but not exactly rocket science!

Anyone living in or around Romania presently will have “enjoyed” a prolonged spell of very hot, dry weather and uncommonly lacking a few end of day cooling storms. All those drinks producers must be very pleased they can avoid an “it was a poor summer” comment in the annual results. Well, this is true if your products are continually on the shelf! No excuses, they must be continually present in front of consumers’ eyes at the precise time they have a raging thirst to slake.

Driving across the Hungary-Romanian border during the heat wave we discussed where to stop for food and much needed drink and decided to cross into Romania as the Hungarian road side service stations all seemed busy. Busy with many people drinking a certain drink and even as we moved on we saw branded trucks arrive to keep stocks moving.

(Aside: Sadly, you leave the good road infrastructure behind in Hungary and any form of transport moves slower in Romania, even the planes! All FMCG producers and distributors would hugely benefit from a half decent road infrastructure.

We needed drinks and the range was wide with all the big names present bar one. This was one brand you expect to find everywhere and every time. The closest you will get to an omnipresent fizzical form in a can or bottle. Shelf empty. Ah ha, the weather is so hot it will all be in the cooler. No. Not there either. (Strangely, nobody had hijacked the prime cooler space, yet......)

Having been involved with drinks Route to Market (RTM) in CEE for several years I was compelled to ask why my fizzy favourite was not available. The simple response was that the distributor did not have any stock. Ok, so why not get some from somewhere else? We can but it cannot get here until after the weekend. I mentioned that you could probably get stock from just across the border in Hungary. Lots of head shaking and nu, nu, nu.

Yes, you would need some paperwork but we are all in the EU so that cannot be difficult, can it?

FMCG_Drinks_RTM_CEE

Yes, you would need to meet labelling requirements but this type of stuff is bottled by a regional giant so both languages are usually present.

Yes, you would need some agreement on transfer pricing so competitive margin positions are roughly maintained but why ever not?

If producers do not get a serious grip on their Route to Market operations and cross-border opportunities then they will lose sales and/or someone will move in and destabilise the market with legal but “grey” imports.

A little more flexibility, pragmatism and entrepreneurship would pay huge dividends when demand is constantly high.

Image courtesy of Chris Sharp at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Dave Jordan, RTM Assessment Tool

FMCG Performance Scorecard: Not seeing the wood for the trees!

Posted by Dave Jordan on Wed, Aug 12, 2015

When travelling, my personal preference is to take only one plane to my final destination. I know this is more expensive than journeys with connections but I find it a much better overall experience. Of course, sometimes I do have to transit and I must have done this on a few hundred occasions but it is nearly always a nightmare especially in places like CDG and currently in Rome. Whoever designed the temporary airside operations during the terminal extension needs their gene pool membership urgently reviewed.

Anyway, during a fairly tight transit you seek out the flight display boards and rapidly scan to see from which gate your next flight leaves and if there are any delays. Just as you have found the right flight and glance towards the gate number column the display refreshes and you have to start again. Then the code share flights start to show so the flight numbers change unexpectedly.

With few minutes to spare I am not interested in Ryanair being delayed as the captain is carrying out a whip-round to pay for the fuel. Or that the Wizzair flight has been cancelled at the last minute, again! (If you are going to name the company after something that sounds exciting, fast, direct and reliable then try and operate in that way.)

There is so much information on one of these huge airport screens that it takes some time to actually see whether you need to run or take your time to negotiate a loan to in order to buy an airport meal. When you cannot see important information quickly there is the every chance of missing the flight.

This week I have been helping a regional FMCG company define a corporate KPI Performance Scorecard. Like many companies they had plenty of data, KPIs etc and as usual more than one format for period end performance reporting. In all cases the previous brief must have been to limit the report to single A4 pages but cram in as much data/information as possible via minute fonts and creative use of text in all sorts of direction.

FMCG_SCORECARD_PERFORMANCE_TRAFFIC_LIGHTSUseful visual colour coded traffic lights were present but there was so much “stuff” on show I did not know where to start let alone focus on what was important and needed the senior team attention. Perhaps this is an unachievable utopia but just one set of traffic lights on a page would provide far greater clarity than a jumble of usually backward looking, defensive statements and assessments.

How would this work?

Green – no need for the senior team to waste their time discussing what is going right. (Certainly valid learning in a different business planning forum.)

Amber/Green – improvement is visible and resources should be applied to keep the indicator moving toward a green light.

Amber/Red – something is slipping here. Why? How? What needs to be done to address the slide?

Red – this is what needs the collective brains of the top team. Spend time on these red items as they will be permanently draining resources without defined leadership and coaching.

Presentations where requests for assistance are obscured by formatting and animation are far less effective than clear, in your face messages.

Must dash, flight to catch and it’s not Wizzair.

Image courtesy of stockimages at freedigitalphotos.net

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

FMCG Supply Chain Scorecard Performance Measurement: Del-Boy Style....

Posted by Dave Jordan on Wed, Aug 05, 2015

In a related post I took a look at the use of Balanced Scorecards in FMCG, Brewing and Pharmaceutical businesses but in fact they are entirely appropriate for any business. Whatever your business size or offering you will benefit from knowing exactly what is going on and where you need to improve.

For once I can name a specific company in this blog. Trotters Independent Traders (TIT) is a well known UK operation involved in general trading and “knocking stuff out”. This very flexible company is run by two entrepreneurial brothers with occasional “help” from a family elder statesman and with even less help from their acquaintances. They operate from an exclusive high-rise, corporate accommodation suite and while they are not yet super rich, “this time next year we’ll be millionaires“is their mantra. This is how the Trotters Independent Traders KPI Balanced Scorecard might look.

fmcg_balanced_scorecard

With a quick glance you can see who is being a dip-stick and who is playing a blinder in this company.

Should you also follow a Balanced Scorecard approach to business? Cushty, you know it makes sense. Le monde est votre homard !

Image courtesy of Enchange.com

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