Supply Chain Blog

FMCG S&OP navigation with cheese and wine.......

Posted by Dave Jordan on Mon, May 28, 2012

Thursday evening and heading out to an organic bread, cheese and wine evening. Oh yes, very sophisticated these days! After temperatures in the 30’s recently the torrential rain and the “end of the world” sky literally dampened spirits as we joined the evening Pipera commuter traffic.

Virtually all the drivers had miserable faces and most drove one handed with a mobile phone crushed against their ear. Why do people hold a mobile phone in their right hand and hold it to their left ear? Driving whilst phoning is bad enough but adding some Olympic quality contortion just compounds the danger let alone the other challenges of driving in Bucuresti.

A sat-nav was glowing brightly in the gloom and for a change we set the language to English. An English digitized female voice pronouncing Romanian street names……You should try this sometime as it gets the evening off to a great start as you hear “Piat-ar Uniri-eye” or “Strayda Pip-pera Toonar-ee”.

Anyway, we were relying on the sat-nav to guide us to the cheese & wine location and it was taking us in the general direction or so we thought.

Cheese and wine? They clearly go together as does “pie ‘n’ a pint” or “bacon ‘n’ egg”, “mici & muştar” and S&OP. There you are, I got the supply chain segue in eventually; be patient!

Prepared for S&OP meeting resized 600Sales & Supply Chain Planning or Sales & Financial Planning or Sales & Marketing Planning just do not sound correct and in reality they are not. S&OP is about how the rest of the business supports those precious salesmen out at the sharp end of the market; be that FMCG, Pharma, Brewing or whatever.

Of course, the success of S&OP heavily relies on how well sales people forecast what they believe they can sell. One side of the bargain does not work without the other. You might have the slickest operational support functions yet your sales team could not sell water in the desert. Conversely, your “A” list salesmen may be continually let down by the inability of the rest of the company to get the right product to the right place, right time and at the right cost.

I still do not tire from telling frustrated CEO’s that S&OP is not a supply chain problem. The supply chain can only work with the available demand signal information and frequently that is far from accurate and reliable. Add in a little forecast bias due to month end peaking and bonus chasing and you can quickly see why many companies get into appalling difficulties on stock levels and write offs, etc.

If only there was a sat-nav to guide business through the myriad of scenarios that continually arise. Now there’s a thought……

How did the cheese & wine event go? We got horribly lost following the comedy pronunciation of the sat-nav and ended up looking as miserable as everyone else behind a disused ceramic tile factory.

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Image credit: HikingArtist

Tagss: Dave Jordan, Humour, Supply Chain, CEE, S&OP, Forecasting & Demand Planning