Supply Chain Blog

FMCG Noddy Holder & Slade Implement S&OP

Posted by Dave Jordan on Tue, Dec 19, 2017

Christmas is coming around faster than ever and who better than Noddy Holder and Slade to celebrate Sales & Operational Planning (S&OP). This festive song has been heard at Christmas every year since 1973! If you have been living in a cave on a remote island and don't know the tune you can click here for the original, boring non-S&OP version.

Ok, let's go, 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 one.

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 the 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 one.

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 one.

Noddy knows best so why not find out about S&OP now and give your business the perfect Christmas gift that will keep on giving.

Image courtesy of Nora Ashbee at Enchange.com

 

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

CEO FMCG Letter to Santa Claus (aka Father Christmas) 2017

Posted by Dave Jordan on Sun, Dec 17, 2017

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

I have been a very good FMCG CEO this year, I promise. If you want, you can check with my colleagues and shareholders. They know how good I have been this year. Apart from the out of stocks of course, oh and the little mistake when 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 therefore  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 do better, I do, honestly.

I forgot about the Route To Market (RTM) mess we had in the peak sales months but that really was not my fault. I also promise to do something about RTM next year and make sure it works properly so people who buy our products are not disappointed. 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 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 and then they broke down again and again. No, it is not a very reliable factory, yet.

Does the warehouse problem count against me 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. 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 FMCG

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

Santa & Opening Presents - Christmas S&OP For Parents

Posted by Dave Jordan on Fri, Dec 15, 2017

“Dashing through the snow
In a one horse open sleigh…”

How many of you started to sing then? Yes, the festive period is fast approaching and the biggest and best supply chain in the world is almost ready to activate. This is always the most efficient supply hain whatever those nice chaps at Gartner may say.

There is no way Santa Claus could achieve his annual success without sticking rigidly to an S&OP process, i.e. Santa & Opening Presents.

The process starts every year on the 26th December just as children start to play with the empty packaging instead of their much sought after gifts. Their engorged parents lounge sleepily in front of the television watching The Great Escape or Jason & the Argonauts – again! The loyal Elves are given their end of season bonus and packed off back to Eleveden Forest in Suffolk. Didn’t you know that is where they live for most of the year?

Before January is over those lovely people who design toys and games quickly introduce new and more exiting models which will become must-haves for countless girls and boys. Toy shops are visited and millions of children quietly note those presents they would like Santa to bring them the following. The demand slowly builds until it is time to bring the Elves back from Suffolk on the eleventh day of the eleventh month – no coincidence there! The first job for the Elves is to get the huge Christmas factory ready to run once again.

santas_sop_planning_cycle_small.jpg

In parallel with this, millions of children around the world unzip their pencil cases with a purpose. Using their best handwriting they tell Santa they have all been well behaved this year and then  list all the presents they would like to receive. This accumulated unconstrained demand allows the Elf factory to start fixing production plans to meet a deadline that is set in stone. Is there a more peakier peak period?

Money does not grow on trees so “Santa” must quickly check what can be afforded from the budget. Remember, the wish lists are always too long and you do not want 100% Customer Service  – keep “em hungry”, I say. The Pre-S&OP takes place with all stakeholders involved to ensure everything is ready to go. You want to avoid stock-outs just as much as you need to avoid expensive write-offs.

After necessary adjustments are made to the planned volumes by SKU, the final S&OP takes place. Bearded Santa is fully dressed in his best red uniform and takes his seat. If Pre-S&OP actions have not been carried out, then there is unlikely to be much “Yo Ho Ho-ing”. Fortunately, everyone is in agreement and the final set of child and associated gift numbers is rubber-stamped. Everyone involved in the Christmas S&OP must operate on the same set of numbers or somebody will be disappointed.

The big day comes and Rudolph leads the reindeers in pulling the delivery sleigh across the world in a complex logistical challenge. Santa makes sure all the presents are delivered on time before little heads lift from pillows to wake parents at 4am! (Well, I did.)

 “Dashing through the snow
In a one horse open sleigh
O'er the fields we go
Laughing all the way
Bells on bob tails ring
Making spirits bright
What fun it is to laugh and sing
A sleighing song tonight”

Before you know it, there we are again on 26th December and the same robust and reliable S&OP cycle starts once more. See you next year Santa Baby!

Image courtesy of Enchange Ltd at Enchange.com

 

 

 

 

 

Tags: Christmas, Humour, Supply Chain, S&OP, Logistics Management, Inventory Management & Stock Control

An FMCG Distributor Is For Life & Not Just For Christmas

Posted by Dave Jordan on Thu, Dec 14, 2017

Ok, so you are unlikley to see this on a car bumper sticker but FMCG Distributors will have a significant impact on your sales performance, probably your variable pay bonus and therefore your CEO aspirations! How have you treated your Distributors 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 do fit this stereotype but others are keenly trying to be treated as and to be, equal partners in your business success. But do you see this?

How are things going in Q4? Have you fallen into the trap of the “sales bonus push”? Year end stock clearance FMCG Breaking all the supply and 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 in the warehouse” scenario?

Companies that spend time and effort in proactively guiding their Distributors, providing relevant training and support inevitably succeed in the market place. Yes, at the end of the day Distributors have to stand on their own two feet but so many FMCG companies assume an organisation calling itself an “FMCG Distributor” inherently knows how to properly 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 highly paid role; the latest being Big Sam Allardyce)

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 a strategy for mutual success. This is far better than continually highlighting deficiencies and using backward looking, discipline focussed KPIs to bash them on the head.

Sit down with your RTM 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 that you cannot change.

Click on the RTM 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 Food Waste: Supply chain speed and agility v inventory.

Posted by Dave Jordan on Mon, Dec 11, 2017

Hooray! Many supermarket chains now sell imperfect or misshapen fruit and vegetables at a discount. As you may know I am a big fan of buying this type of food as taste has nothing to do with shape based on my massive culinary knowledge. Whether my potatoes are knobbly, or my parsnips look like Donald Trump, I simply don’t care.

My other food gripe has always been about “best before” and “sell by” plus the simply ridiculous, “display until”. Food producers and legislators don’t make it easy for consumers, do they? Surely there can be 1 definitive statement for a food safe shelf life measure, for example “do not consume after….”. Slowly but surely progress is indeed being made to remove this confusion for consumers and waste for everyone in the supply chain including you.

This charity in Denmark collects close to expiry, expired and slightly defective product from producers and supermarkets and sells to the public with at least a 50% discount. This has helped to reduce unacceptable food waste in difficult economic times. Unfortunately, this charity has been so successful it has started the process of turning their operation into a branded supermarket and will have 3 shops open in 2018.

FMCG_FOOD_WASTE_PLANNING_FORECASTING.jpgAll good stuff then as long as the waste mountain is reduced. Well no, not at all. Why are some big name FMCG companies producing so much food stock that is either destroyed or as in Denmark, redirected to a charity. If you look at the video in the earlier link you will see some well-known names who will publicly claim to enjoy supply chain excellence. Getting their products to the consumers on time in full and at lowest cost is all very well but if the stock ends up as not required, it is surely a hollow boast?

I agree there will always be some inaccuracy in forecasting – there must be – but the volumes involved are not 1 or 2 cases, it is pallet loads. These companies will all be using various clever IT tools to forecast and supply the market demand but are they guilty of pushing too much into the retail end of the supply chain? Competition dictates that your products must always be available, and the consumer decides on the spot if she/he buys Coke or Pepsi.

I am still not convinced sales colleagues get forecasting in the way supply chain people must. The forecast must be based on what is being pulled along by consumers rather than what is pushed in to reach a monthly top line number. If sales forces in a number of foods companies do this then inevitably there will be waste at the far end of the extended supply chain.

Someone will get their forecast horribly wrong and when thinking about huge brands even a small inaccuracy can mean a hefty contribution to the waste mountain of food and expense.

You cannot ask your competitors what their volume plans are for the month to make sure there is no over-supply, but you can bring more agility to your supply chain. Demand fluctuates across the month irrespective of those companies still “enjoying” unrealistic month-end pushes. You might look at how much safety stock you have built into the plan and along the chain, reduce that cost and invest it in speed and flexibility instead.

Lose some fat from your inventory waist and you will be able to move much faster when the market or a competitive move demands.

Image courtesy of Stuart Miles at freedigitalphotos.net 

Tags: FMCG, Forecasting & Demand Planning, Inventory Management & Stock Control, WASTE, Food

FMCG: I’m a Supply Chain expert…Get me out of here!

Posted by Dave Jordan on Sun, Dec 03, 2017

The definition of celebrity is a famous person, VIP, very important person, personality, name, big name, famous name, household name, star, superstar, celebutante, leading light, giant, great, master, guru. In that case why do I only know 3 people from the 2017 series? One boxer, a footballer with an ironic surname and Boris Johnson’s father. I don’t know Mr Johnson either, but he helped produce Boris the buffoon so probably deserves to endure a degree of hardship.

I guess I have lived outside the Brexit zone too long and simply do not appreciate the celebrity importance of this collection of egos but some of these people are obscure. If they are stars or household names, then surely everyone will get a go at being handsomely paid to eat crocodile tongues on holiday down-under. My turn must come!

What’s more the show is being presented by the best UK double act since Morecambe and Wise……UK TV is becoming a veritable talent vacuum.

FMCG_CONSULTING_TALENT_HUB_INTERIM

Dare I say it, but a similar dynamic is emerging in the world of supply chain consulting. With business media site like LinkedIn being unregulated you can add whatever you wish to your profile and work history. Unless someone notices a blatant fabrication and takes the time to suggest a text correction, this becomes the accepted reality where the term “expert” is overused. I even recall one LinkedIn member set his status as “Current Company: Unilever – Position: Owner”!

Another definition for you; expert - having or involving a great deal of knowledge or skill in a particular area. That level is not achieved easily or in a few years and being employed for many years in supply chain does not mean you can simply switch to become a credible consultant. From personal experience making that change after almost a lifetime in an FMCG multinational (no, I wasn’t the owner either) is not easy.

There are 2 important elements to being a successful consultant after working on the other side of the fence. Real and deep expert knowledge is a given but the task of imparting that to often cautious or even suspicious clients is the difficult part of the job. When you work in industry you have the authority of your work level or job title which make things happen. When consulting you have diddly-squat authority and making things happen and stay happened is a tough new skill to learn.

When you are in the market for consultancy expertise you must carry out some degree of due diligence. Check out and corroborate the claims of past success with particular focus on how expertise was deployed in the receiving organisations.

Don’t be taken in by the “expert” moniker and use something like the Talent Hub to find out who is availableand what they have actually achieved in the wonderful world of consulting.

It's a jungle out there!

Image courtesy of Stuart Miles at freedigitalphotos.net  

 

Tags: FMCG, Interim Management, Supply Chain, CONSULTING