Supply Chain Blog

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

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