Supply Chain Blog

FMCG Supply Chain - What do all those initials really mean?

Posted by Dave Jordan on Wed, Feb 02, 2011

SC Abbreviations resized 600Like many business functions Supply Chains use multiple initials and/or acronyms to describe various tasks they manage on a daily basis. Those not familiar with SC-speak will often sit bemused in meetings as various initials are quoted and debated and then usually blamed for some tenuous lost sale claimed by Sales and Marketing. Here we take a look at just a small selection of those SC initials.

SC – Super Colleagues. Well, I may be biased but that is what you find is usually the case. Supply Chain people have to react to sometime wildly varying demands and impossible timings but more often than not they succeed to get stock in the right place at the right time.

SOP - Secures Our Performance. If you do not follow an S&OP process and your business is doing well and is robust then a pat on the back to you. If your business is struggling then you might consider the benefits of S&OP which can make all the difference.

SAP - Spreadsheets Are Preferred. A common problem in many businesses and what is also common is the number of CEO’s who believe spreadsheets are not being used in their workplace! They probably are but what can you do about it?

IKA- Irritating, Keep Away. In W Europe the big name Key Accounts may well be the future of retailing in the FMCG sector but in many other parts of the world the reality is quite the reverse. TT is a very important part of many businesses yet most fail to pay sufficient attention to the continued development and growth of the Traditional Trade channel.

SKU - Sales Keep “Upping”. Introducing new skus really should be a cross business decision taken within the context of S&OP and sound financial analysis. Sadly, this does not happen very often as businesses rack up lengthy sku lists where the tail items do not even pay for themselves in turnover and /or profit.

KPI - Keep People Interested. The old adage of “if you don’t measure it then you cannot improve it” is certainly true here. Be careful not to have too many KPI’s but make sure you have a set which ensures everyone knows how they impact team performance and results. Reward against the relevant KPIs and your staff will follow them keenly.

3PLP - 3 People Loading Products. Think long and had before outsourcing your logistics operations to a 3rd party. They may not be ready to take on your business seamlessly.  Prepare thoroughly and ensure you know exactly what you want from them and the relationship. A big step that is difficult to reverse so be careful!

WMS - Where’s My Stock? Your 3PLP partner should be left to run their own business as that is what you pay them for. However, you need to be involved in the stock counting process or you will lose sales and experience costly year-end write offs.

4PLP - 4 People Loading Products ………..but perhaps slightly faster? If you have successfully used 3PLPs for some time you might wish to take a look at what a 4PLP can offer your business. This is not for everyone but can be very effective.

RTM - Retail Takes Money. Whether your focus is on IKA or TT how you manage your distribution network will be a key driver of your success in the market place. It is a fact that companies spending time and effort getting their TT distributor networks in good order are more successful.

There are many, many more initials used in Supply Chain but this set will do for a kick off. TTFN!

Tagss: SKU, FMCG, Route to Market, Dave Jordan, KPI, Traditional Trade, S&OP, Logistics Management, Distribution