Supply Chain Blog

FMCG Route To Market Challenges; Learn from IKEA

Posted by Dave Jordan on Sun, Nov 19, 2017

There is no excuse in visiting IKEA on a Sunday before watching 22 millionaires with daft hair styles kick a football around on live telly. The weather was cold and the air was full of autumn drizzle and as I turned into the car park the scale of the folly dawned on me; the IKEA car park was bursting at the seams. Cars were on pavements, on grass verges and on the approach road; grim.

There were entire extended families pouring out of cars and into the store. In parallel,   equal numbers were exiting before trying to squash brown flat-packs of “destroy it yourself” furniture and fittings called Grult, Splad and Twong into and onto impossibly small cars.

What do these people do when they have removed all the air from their cars? Do they give granny and granddad a few coins to take the bus home? There is no way you can fit all the people and the flat-pack must-haves into some of these cars.  Maybe that is why IKEA provides free rope on the loading bay; it is to strap the unfortunate grandparents onto the roof of the car.

Oh well, here now so might as well join the hoards of people unable to control a shopping trolley; absolutely no sense of direction and with variable but low levels of short-term memory. I hooked a yellow bag over my shoulder, picked up a pencil and I too became a zombified IKEA shopper!

I know there is a science to store layout design whether it is a Tesco supermarket, a Hornbach DIY store or an M&S type outlet. The store owner wants everyone to see everything at least once and they want exposure to be just at the right time when for example, the shopper has been subliminally convinced that the bright pink Plobo stool would look really nice in their kitchen (believe me it won't).

Ikea Shop Floor FlowOh, but the chaos this causes in an IKEA store! Being a supply chain type I would make the whole store strictly one-way with shoppers not permitted to double-back to soft furnishings or for a forgotten low energy light bulb. In fact, if I had my way I would make the floors with a defined downhill gradient and ensure trolley wheels were oiled hourly to help people on their way, through the broken furniture bargain section, past the cheap fast food and out into the car park. What about a small battery pack on each trolley which delivered a persuasive electric tingle if you tried to push the trolley against the traffic? Too extreme, possibly?

Think of all the wasted hours and effort of moving all the way through the store then insisting on reversing the entire route and getting in the way of everybody else. Then came my eureka moment. I realised where I had seen this behaviours before and why I perversely enjoyed dodging the trolleys in the IKEA maze.

This is precisely what many FMCG, Brewing and Pharmaceutical companies suffer in their Route to Market distribution planning every single day. Wasted miles, wasted fuel, wasted hours and in all that time there are customers not being serviced.

RTM Assessment toolIf your sales are struggling along towards the end of the year and the stream of excuses for gaps appears endless, you might take a close look at how much time your sales people spend travelling to, selling to and guiding distributors. If your sales team has adopted the IKEA system logic then you have just spotted a huge opportunity to improve your Route to Market (RTM)performance.

Get out from behind the desk and have a closer look. Get some IKEA rope, tie yourself to the roof a salesman's car and see where some simple experience, thought and logic can significantly add to your bottom line. 

Too busy to ease yourself out of that IKEA chair? Then seek out some professional resource to take a cold hard look at how you operate RtM in the traditional trade.

IKEA image courtesy of A littleSprite 

Tags: Route to Market, Interim Management, Dave Jordan, Supply Chain, Traditional Trade, Sales, Distribution, RTM Assessment Tool

FMCG SKU Proliferation: You DON'T need lost sales in Q4

Posted by Dave Jordan on Mon, Nov 13, 2017
Extra SKUs sneak onto price lists when nobody is looking. Sales & Marketing colleagues prefer new launches with lengthy SKU lists different flavours, different sizes, different colours, new packaging etc. How many shelf facings do they want? How do these decisions get through S&OP meetings? (You do run an S&OP process, don't you?)

Do you know this SKU proliferation is likely to affect your customer service? Rather than delighting more and more customers you maybe disappointing them and wasting countless Euros at the same time. Introducing an SKU is a cross business decision, or should be! When considering new SKU introduction at your next Board or S&OP meeting then the supply chain people should ask some testing questions.

Cost per SKU. Have you ever sat down with your Management Accountant and calculated how much it costs to have an SKU on your price list? Sales staff will bemoan the rising listing fees but in reality the cost of an SKU is much, much more. Including, e.g.

  • An employee must spend time buying the different label, dyestuff, cap, box, etc.
  • The new raw material/packaging must be stored in a warehouse.
  • Someone must call it off at the factory.
  • The factory must schedule and make the SKU.
  • The finished product is stored in a warehouse.
  • Someone at the operating company must plan the SKU.
  • Transport into and ex-factory.
  • Transport to Distributor or Retailer etc, etc

All of these activities and many, many more ensure that the cost of having an SKU on the books is significant. In a very rough rule of thumb the cost of having any 1 SKU on the books of a medium-sized company is typically 30,000 Euros per annum.

Factory complexity. Time is money in factories as they try and make their assets sweat and get as much out of the gate as fast and cheaply as possible. Each colour or perfume change or label or pack size adjustment stops the production line and steals valuable time which you cannot recover.

Logistics. Each individual SKU requires a dedicated pallet or rack or bin location. The more SKUs you have the more money you are paying for space. When you have 16 variants of the same shampoo pack size you can understand why picking errors occur, lowering your customer service and causing lost sales.

Interim_Management_FMCG_Dave_Jordan_SKU_Complexity.jpgPlanning. At year-end low value SKUs really drag your business down as resources are applied to plan and deliver SKUs to market which may increase your volume number but not your profit line. Your scarce resource should be focussed on delivering those SKUs that make a real difference to profit rather than spending time on low value/slow moving SKUs which may actually have to be written off in the long term.

SKU rationalisation. Ok, so despite the above you are drowning under SKU complexity. Far too many organisations launch a new SKU and then fail to revisit the data assumptions on which it was first introduced. Firstly, if a new SKU is not even expected to deliver at least 30,000 Euros (or whatever your in-house figure may be) profit then DON'T LAUNCH IT! For all SKUs on your price list you should carry out an SKU Rationalisation exercise preferably quarterly but at least annually. SKUs that do not meet profit/margin/volume/GP criteria should be placed on watch. If they remain below your cut off points then it is time to propose a delisting.

The ideal time to carry out that rationalisation exercise is before you submit Annual Plan 2018 and certainly before the end of 2017. Your staff will be concentrating on the day to day operation so recruitment of an external resource to carry out the segmentation is advisable. The temporary recruit will be dispassionate and unbiased and will deliver a proposal which is right for the business and not just right for some. 

Of course, there will always be special cases like SKUs that constitute a range or a niche local jewel but as long as these are the exceptions then you have a chance of a fast flowing, efficient and reliable supply chain ready for 2018. 

Need more expert advise from readily available talent to address SKU Complexity? Please click here. 

Image courtesy of Supertrooper freedigitalphotos.net

Tags: Customer service, SKU, FMCG, Interim Management, Dave Jordan, S&OP, Sales

NHS UK Supply Chain Waste: Planning Patience

Posted by Dave Jordan on Thu, Sep 28, 2017

I have spent some considerable time visiting medical facilities both at home and in UK and in the latter case I was not impressed. The National Health Service is still the envy of the rest of the world and rightly so. When you consider the policies and procedures in other countries the people who benefit from the NHS really should not complain about a 4 hour wait as you will be seen and you will not be asked if your bank card is contactless before you get to see a medical professional.

The NHS is struggling but I think that is partly due to people using the A&E facilities for an ingrowing toe nail or a stomach upset after a magmaloo curry (search that and Jasper Carrott) the night before. The strain on the service would be a lot less if treatment really was restricted to people who have bits hanging off and when life is under threat.

There is another area where the NHS struggles and that is on their supply chain. Yes, it is of course complicated; it is hard to demand forecast what accidents and illnesses will be wheeled through the doors and it is a supply chain that must deliver. Essentially everything should be available, everywhere at all times of the day in a non-stop operation. You cannot be out of stock on surgical sutures and make do with a bit of masking tape or ask the patient to "press firmly here" until replenishment arrives.

As a result, I saw horrendous waste on an hourly basis. Medicines, bandages, food (yes, I know it's not too clever anyway), utilities and perhaps most importantly, staff time and beds. At a time when the NHS is thought to be lacking beds I thought this was perhaps the most serious fault as waiting time for beds is high. Indeed, many non-urgent operations are cancelled as beds are apparently not available. Yet, beds were vacant and beds were still occupied by cured and dressed patients waiting for transport home.

SUPPLY_CHAIN_PLANNING_FORECASTING_costDrugs were delivered for people who had been discharged or even sadly died. Not one bit of this was deliberate but there appeared to be a frailty of planning. I am certainly not suggesting the operation of a 24/7 nationwide NHS is an easy operation to run but I do feel some of the waste listed earlier can be avoided but not by rigidly sticking to current practises and procedures. That clever bloke Einstein defined doing the same thing over and over again and expecting different results, as insanity.

I would be similarly insane to say all the problems can be solved easily but when I met with the equivalent of the Ops Director at one major hospital in an English city currently without any Premier League teams, I was rather shocked. There was tacit agreement that numerous problems existed and there was an understanding of the improvement suggestions I made but then she bluntly played the Einstein card. You can only advise the NHS IF you have previously advised the NHS. What? Surely that is a recipe for a rapidly downwards spiral of inefficiency leading to collapse. Think out of the box!

I believe the NHS could learn from industry and even correction of a few basic errors mostly linked to simple data and information flow could deliver substantial sums. In 2015/16 the NHS budget was £116 billion, yes 116 billion of our weakening pounds. That is a serious amount of money that is not being well spent in some areas, in my humble opinion.

I asked the Ops Director what her biggest challenge was and I expected the answer to be a secure electricity supply or clean water or drugs availability etc, but was just a little surprised to hear she gets the greatest grief from bosses when...... the entry barrier does not work on the visitor car park.

Image courtesy of Stuart Miles at freedigitalphotos.net

 

Tags: Dave Jordan, Performance Improvement, Supply Chain, Forecasting & Demand Planning

FMCG CEE Route To Market: Importance of relationships

Posted by Dave Jordan on Tue, Sep 26, 2017

You have great brands and brand awareness, a fantastic internal supply chain, tight financial control, top class HR, a top-notch sales force, innovative marketing - surely a recipe for success in CEE? Surely this must be the case? Sadly, not always and some big-name companies frequently get this important relationship badly wrong.

Blue chip companies with internal operational excellence continue to flounder when serving the Traditional Trade in CEE. Admittedly, this trade channel has reduced in importance over the past years but it still accounts for a sizable portion of markets which will return to good growth sooner or later. International Key Accounts and Local Key Accounts will continue to take share in urban areas but in a country as vast as Romania, for example they will not conquer the rural market in the medium term.

Producers need knowledgeable and reliable Route To Market partners to reach the smaller corner shop outlets. There is no shortage of operators willing to be distributors for big name clients but how many of them are really equipped and ready to do the job properly? Producers are often guilty of placing their reputations and ultimately profits, in the hands of enthusiastic amateurs. In the sporting definition, true amateurs do not get paid for their work and distributors do not get paid by producers when they fail to meet targets.

Unfortunately, instead of doing something about the short-comings of distributors, producers proudly celebrate securing penalties or better terms through negotiating against poor performance. What is the point of doing that? Instead of carping on about how poor these "partners" are why not get out there and help them?

You cannot build houses on sand yet producers expect distributors to swiftly dove-tail into their in-house processes, IT, style, ethics, reporting schedule etc. Yes, they probably exaggerated their capabilities and readiness during the pitch but you should be able to see through that or at least be ready to quickly assess capability.

Is it any wonder why so many distributors go under when they are not considered partners and in some cases, are believed to be a hindrance? Distributors do not deliberately make mistakes that lead to their own reduced income. They too are in business to make a few Euros to take home at the end of the month.FMCG_RTM_DISTRIBUTORS_PARTNERSHIPS.jpgProducers need to look closely at the capability matrix offered by their distributors (or more importantly, potential distributors) and in most cases, this will not match up to requirements. Do something about this; build capability where it lacks and you will reap the benefits in having proactive partners going that extra kilometre to make a sale for you.

Those FMCG producers who are in tune with distributors strengths and weaknesses AND do something about the latter will be in pole position with a Ferrari while less wise competitors are at the back of the grid with a horse and cart. The route to your end market can be a lot easier than you fear.

Image courtesy of Stuart Miles at freedigitalphotos.net

 

 

FMCG Cost Control: Boosting Brewing Bottom Lines

Posted by Dave Jordan on Tue, Sep 19, 2017

Picture the scene in many a brewing boardroom; a terse note has arrived from the suits at HQ telling the boss to urgently reduce costs as the year-end result is not going to look pretty. Why do all the board directors then look silently at their supply chain colleague? Of course, there are significant costs associated with a modern supply chain but you cannot make significant savings from that infrastructure overnight.  Supply chain budgets very rarely contain significant discretionary spend unlike the bank busting sums in the pockets of sales and marketing!

BREWING_COST_SAVINGS_BOTTOM_LINE_FMCG.jpgAs is usually the case, let us assume the SC team is constantly looking at ways to reduce cost in factories, logistics networks, 3PLPs, planning etc. What other costs could be challenged without causing discontinuity and unnecessary stress in the company?  The SC usually leads any cost efficiency projects which I think is fair enough as the discipline is most familiar with cost control and challenge.

Here are 5 areas I feel are always worthy of visiting when looking for "low-hanging fruit" bottom line benefits.   

  1. Old promotions, soon to expire stock, old artwork/label stock, slow movers. All companies (particularly FMCG) will have some or all of this and for various reasons - some good, some not so good. If you do not routinely address this you will be hit with an unexpected loss at year end or at the next stock count. Bring the list to the board meeting and hold accountable the actual people responsible for creating the stock in the first place. Sell it out and stop paying for storage too!
  2. Promotional activity. Is it all really necessary and does it actually pay back? Do you know how much of that original pristine packaging assembled in the factory is destroyed in the name of the latest promotional whim? Plastic film, outer cases and trays litter the floors of repacking operations everywhere. You have paid for that original packaging and now you are paying someone to destroy that and replace it with fresh material. Just think of all those Dollars/Euros that could be spent in a much more customer focussed way or simply saved? When you consider all the extra labour, logistics and packaging material just how much value is really generated for your business?

  3. How many SKUs do you need? Do you know how many your business has when you include all the promos and specials? Every single SKU costs money to source, transport, plan, store and deliver. Plus, the more you have the more likely you will generate the problem discussed in point 1 above. Analyse your current portfolio and see what is really driving value in your company. Conversely, see what is sucking value out of the business at the other end of the scale. Every extra low value SKU clogs up the wheels of your Sales & Operational Planning (S&OP) process.

  4. Telephones and internet. Always a difficult area as it can be perceived to be petty but it is usually an uncontrolled drain on cash. If you have provided staff with internet access on laptops or tablets or telephones you can be sure you are funding personal surfing time. Unless free telephone calls are part of the remuneration package why should the employee not pay for them? In my experience, significant cash can be saved through just a little prudence in this area. Do you leave your telephone network open at night with unlimited international dialling access? Also, the next time you see 2 people in the same office talking to each other on company mobile phones.......

  5. Discretionary spend. Don't make it discretionary! If budgets exist for team building and entertainment you can bet your life those funds will be used. Do you really need to "team build" every year? These occasions tend to be considered as a perk of the job and I am not convinced of their value when they happen so often. If team building sessions are to go then you should ensure this applies to all departments. Letting the marketing team building slip through will simply demotivate the rest of the company.

Achieving visible buy-in at the top table which is cascaded to teams will generate the best initiatives and ensure alignment. Paying consistent attention to these and other cost areas might save you from the ultimate saving of issuing redundancy notices including possibly, your own!

Image courtesy of Pixomar at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Dave Jordan, Forecasting & Demand Planning, Cost Reduction

FMCG Turn-around Intensive Care Recovery KPIs

Posted by Dave Jordan on Wed, Sep 06, 2017

On a daily basis the amount of care we give to the human body is remarkably little. When you are feeling in good shape the best the body can hope for is a good wash, a brush of the teeth and a slap of moisturiser if you are a bit of a girly. What else? Haircut and manicure perhaps oh, and possibly a check that your weight has not dropped that desired 10% overnight.

Considering the complexity of the human body and how we cannot live without it we do not spend too much time analysing how it is performing. We probably spend more attention on our cars and IT gadgets. Why is my PC running so slow? The car is overheating, I must check this now. Such symptoms are immediately of prime importance and top of mind and must be addressed now!

This all changes when we are feeling unwell. Suddenly we are taking our temperature, blood pressure and pulse rate. Blood tests may be needed. You may be wired up to monitor to see how the heart or brain is functioning. The body is now getting the intensive care it needs in hospital. Recording and monitoring this raft of data is the route to a hopefully full and speedy recovery.

FMCG_RECOVERY_SUPPLY_CHAIN_KPIS.jpgIf your business is operating well and there is even some growth in these testing times then the usual keep fit-heart monitoring Balanced Scorecard KPIs are reported weekly or monthly. The focus is usually on getting your stuff to customers and onto shelves at the right time, in the correct quantity and at the lowest cost. Along with other company measures, e.g. finance, HR, SHEQA, the scorecard shows the health of the business.

When all is not going smoothly however, the Balanced Scorecard may need supplementing with other measures. In companies where sales are below expectations and cash flow has dried up you need intensive care focus in that area. This does not mean you stop generating the Balanced Scorecard as this will contain important financial and non-financial measures. Instead, you need to place the sensors in the critical locations.

What about when things are not going well? Measuring the usual set of KPIs is all very well but when you are in a mess you need some intensive care. For businesses struggling with tight cash flow here are top ten tips for some relatively simple Recovery KPIs:

  1. Sales-out Sales-in do not guarantee you a final cash sale to a consumer so focus on the final sales transaction.
  2. Discounts Control how much discounting is taking place by those generous sales people. Is it authorised in advance and at the correct level?
  3. Debtor Days This is money owed to you so negotiate favourable terms and constantly review. If 60 days has been in place for years then it is about time this was challenged so apply some pressure.
  4. Creditor Days You owe this money but if you upset suppliers they will stop supplying! Renegotiate where possible and do your best to pay on time as you never know when you really need a favour.
  5. Overdues Where money is due to you and has exceeded the agreed terms you need a persuader to get on top of late payers.
  6. Forecast Accuracy Do not look at every single SKU; apply segmentation principles. Determine which SKUs are important and make a healthy profit, focus here.
  7. Lost Sales Investigate every significant lost sale and systematically apply a 100-year fix so mistakes do not recur.
  8. Potential write off Monitor stock age internally and at distributors and avoid this criminal cash waste.
  9. RM/PM stock If you are overstocked you should not re-order and you might consider selling some items. Your stocks should be aligned with those important SKUs identified above.
  10. Finished Goods stock Again, ensure your key SKUs are always available in the required quantities. Promote any excess or slow-moving stocks to generate income and minimise potential write off.

In addition to the sensible tight control of discretionary spend this approach can stabilise your vital signs and guide you back to a healthy glow without the intensive glare of the suits from HQ.

Imag courtesy of moggara12 at freedigitalphotos.net 

 

Tags: FMCG, KPI, Supply Chain, Cost Reduction, Inventory Management & Stock Control, balanced scorecard, Recovery

Supply Chain Performance: Budget Airlines and KPIs……

Posted by Dave Jordan on Wed, Jun 14, 2017

I have never been a fan of budget airlines and certainly not since one left me sleeping overnight in the back of beyond that is Luton Airport. That may be an exciting addition to a student’s back-pack holiday itinerary but when you have a glass back it is not so appealing.

Nevertheless, they do fly to or near to where I need to be and the prices are much cheaper if you book well in advance, don’t pay with a credit card, don’t carry any luggage, don’t eat or drink, wish to sit next to your wife or use the toilet (thank you Fascinating Aida).

So, once again I found myself on the busy Birmingham – Bucharest route after visiting the heiress and some things are inevitable on a no-frills airline. I know the dimensions of my carry-on bag but so many others either forget to check or think they will get away with a dayglo sausage the size of Sicily without paying the penalty fare. That’s how they make their money; last minute, extortion, take it or leave it.

My second frequent observation is that there is usually someone sitting in my seat when I board. Yes, they move when challenged but only to another seat which is not theirs either. I know some airlines do or did provide a free seating/chaos policy but when you have a seat allocated on the boarding pass, sit in it!

Finally, we are off the ground and ascending before soon the engines throttle back and this is when I want to shout out some helpful advice to the captain, “change gear now”. I know how planes work but that bit off take off always makes me uncomfortable. The beep of the seat belt sign going off leads to an immediate dash for the toilets (I hope they pre-paid) and a long line of shuffling bodies.

The line of casually shuffling bodies soon turns into a twitching queue of concern as the red toilet sign above the cabin remains illuminated. Phones are consulted to pass the time and refocus the mind; people even read the safety information booklet and the duty-free magazine which is anything but duty free, of course.

Finally, a Flight Attendant needs to transport a metal trolley on inedible stuff to the other end of the plane and realises she cannot possibly conquer the lavatory line and politely knocks on the toilet door. No answer. Another tap-tap-tap plus an enquiry if everything is OK also fails to change the indicator from no-go red to free flowing green. The red light seems to glow brighter as if to irritate those with crossed legs.

This is now serious as the inedible stuff is getting cold and more people are standing in the aisle than sitting in seats. The pilot is probably having to battle with the controls to keep the plane centrally balanced. Something must give and judging by the faces of the queuers, this will be very soon. The red light glows.

Then action; the queue is guided away from the toilet door and back behind the curtain. Male and female crew members are poised to open the door using the emergency switch and they don’t know what or whom they will find. The door is cracked open as male and female eyes strain to see which crew member will take the lead and help the possibly stricken passenger. The red light vanishes and the green for go appears above the curtain. Relief is at hand.

There’s nobody in the toilet. The grateful mass of people takes one step forwards as the end is finally near.

FMCG_SUPPLY_CHAIN_HUMOUR_KPI_ANALYTICS.jpgSo, what went wrong? Will the cleaning service at the destination find something a very unexpected item in the garbage area? Is someone hiding in the skin of the aeroplane plotting something nasty?

There was never anyone in the toilet in the first place and staff had forgotten to flick the switch to make it open for business. The red light stayed illuminated but it was not telling you what the real situation was with toilet occupancy and the impasse was allowed to go on for quite some time. The KPI (kay pee aye) was showing red but it was not telling you the reality and certainly not everything.

Don’t always believe your KPIs are telling you the whole story; challenge them routinely. They are frequently an indication of performance at a certain moment in time and a longer-term view is necessary as the business evolves. If your business is in trouble you may need a set of Recovery KPIs whereas a booming business on a roll may need a set which is far more forward thinking and aggressive. Supply Chain Analytics help you take the longer term view.

Blindly believing long term over or under performance can see your company quickly performance go down the pan.

Image courtesy of phasinphoto at freedigitalphotos.net

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

Interim Management & Consultancy – What's the difference?

Posted by Michael Thompson on Thu, May 25, 2017
At Enchange, we have provided many supply chain interim managers for clients over the years. I was discussing our supply chain interim management services with a client recently and she asked whether she should be hiring interim managers or consultants.
 
We had a long chat and it turned out that interim managers were the right solution for her requirement.  The main reason in this case was that she insisted in retaining total control of the project and the key need was for expert resource to deliver a number of work stream projects.

So, for anyone else facing a similar dilemma here are seven key differences between interim management and consultancy:
  1. Notice  Interim managers are often placed at short notice.  Consultancy contracts usually take several months to agree and commence.
  2. Terms of reference  Interim management assignments nearly always commence with ‘implementation-driven’ terms of reference.  Consultancy contracts nearly always involve a process of analysis and usually include design work.  For an interim management contract, the analysis has usually been undertaken by the client.
  3. Project work  For project work, consultancy projects provide expertise not available in the company.  Interim management projects could normally be carried out by client personnel but resource is usually a constraint.
  4. Executive power  Interim managers are often called upon to demonstrate strong leadership from the outset of an assignment and can have a large degree of executive power.  Tough people decisions are sometimes made quickly.  It is unusual for a consultant to exercise executive authority.
  5. Client relationship  Typically interim managers become part of the client team quickly and identify totally with the needs of the client company.  Consultants, while always working closely with clients, often maintain an ‘arms-length’ relationship with client staff and identify totally with project deliverables.
  6. Contract duration  Interim management contracts are typically of longer duration than consultancy contracts.  However, the maximum duration for any assignment should not exceed 18-24 months.
  7. Fee rates are typically lower for interim management contracts.  At Enchange our rates for top quality interim supply chain managers certainly are lower.

 users guide to interim management

Tags: FMCG, Interim Management, Performance Improvement, Pharma, Michael Thompson, Supply Chain

Top 10 Times You Need Supply Chain Interim Management

Posted by Michael Thompson on Fri, May 12, 2017
Supply Chain Interim ManagementI have been talking to a number of supply chain executives during the last few weeks and something of a theme has emerged.
The theme is the immediate need for highly skilled supply chain resource, available at short notice, with the flexibility to switch off the resource at wil..….and at fee rates comparable to existing resource. “So nothing unreasonable there”, I thought.

What we actually discussed was supply chain interim management and how the placing of a specific skilled resource can have a dramatic postive impact on an organisation. We went on to discuss the typical roles that supply chain executives are currently demanding.  

With this and our recent experience with clients, I offer the following top 10 supply chain interim management roles:
  1. Resource gap. Bridging a gap prior to a full time appointment being made.  This was mentioned by everyone – “we need a planning manager …. now”.
  2. Backfill. To temporarily backfill a position because the incumbent manager is about to be seconded to a project or may be emabrking on maternity leave. “We have a large project that has started (ERP projects were mentioned a number of times) & we need an interim Head of Supply Chain”.
  3. Project Managing a specific project that would normally be carried out by company personnel but experienced resource is a constraint.  This is a common need and mentioned frequently.
  4. Temporary or part-time operational assignments the need for which will end, do not justify a full time employee or are designed to coach and train a new manager. 
  5. Holding the fort in a situation where company strategy is not decided and operational roles are unclear while the business must keep going forwards.
  6. Crisis. Managing a crisis when a unexpected event occurs, e.g. dismissal, death or unexpected departure.
  7. Post-acquisition or merger management prior to establishment of the full management team.
  8. Pre-sale management of a company or business unit in preparation for a sale.
  9. Urgent change management of strategy, cost, structure, organisation, process etc., when an external threat is recognised. e.g. sudden loss of market share, competitive move, unsustainable debt position, hostile take-over bid, etc.
  10. Turnaround management or ‘company doctor’ when a permanent position is inappropriate or the role may be perceived as too risky to attract a permanent candidate.
My discussions were with a relatively small number of people so I would welcome any further comments or indeed, requests for assistance.

 

Tags: FMCG, Interim Management, Performance Improvement, Pharma, Michael Thompson, Supply Chain

Relieve your FMCG pain - secure Interim Supply Chain Support

Posted by Dave Jordan on Wed, May 10, 2017

I know you are busy. Not enough hours in the day. Deadlines rapidly approaching. Your children call you Uncle Dad or Auntie Mum. Before the stress takes its inevitable toll think about relieving the pressure without adding to head count.

Interim Manager SoftedgeWhy s Interim Management an opportunity at present? Mainly as a result of the continuing economic conditions numerous companies have folded this year and a similar number have been taken over or merged with others. Obviously companies that fold are too late to be helped although I am not sure too many actually sought the right professional help and guidance in good time.

Those companies and Private Equity players merging or buying in this period need to have their new businesses in good shape to ensure the ROI in the contract deal has even a chance of coming to fruition. When the green shoots of recovery actually start looking like shrubs, shareholders and PE owners will rightly expect their pound of flesh.

One route to accelerating and establishing integration and realignment is to use the services of an Interim Manager. Hear are 7 reasons why hiring an Interim Manager (IM) can be of benefit.

  1. Return On Investment. No, it is not more expensive than hiring full time (FTE) or temporary employees. Take all recruitment and employment costs into account and you will appreciate the efficiency of IM. You may pay your employees for turning up for work whereas IM can be remunerated against set objectives and delivery. (Consider the cost if you make the wrong choice of FTE and have to go through a lengthy, disruptive and expensive exit process!)
  2. Speed. Senior Interim Managers are readily available for Supply Chain tasks. You do not have to waste time going through a lengthy search and selection process with a fee-taking headhunter.
  3. Expertise. Interim Managers are usually seasoned professionals with deep operational experience. A vast majority will have successfully held senior roles in blue-chip organisations for long periods.  No training is required; you get a “vertical start-up”.
  4. Objectivity. Interim Managers are able to look at a given situation with a fresh set of eyes and will not be afraid of “treading on toes” or telling the boss there is a better way!
  5. Accountability. Interim Managers are not there to advise. They are in place to handle a specific project or a department in transition. Unlike full time employees they are very comfortable at being rewarded (or not) based on black and white objective achievement.
  6. Effectiveness. Possibly the most obvious contribution of IM. Once the Board has given a mandate to carry out a task, the IM will get on and do it without struggling through a bout of inertia. “Just Do It” sums this up nicely. 
  7. Commitment. Interim Managers remuneration means they have a direct financial stake in the assignment. They are not there to make friends or pave the way for recruitment. They wish to do the job well, get paid and move onto the next challenge.

If you have a difficult job to be done within a defined timetable and you do not currently have the resources in-house you should consider the value an Interim Manager can bring both to yourself and your organisation. Gaze into the future and see what tough jobs need to be done well now to ensure you are ahead of the game.

Interim Management User's Guide

 

Image credit : CELALTEBER

Tags: Interim Management, Mergers & Acquisitions, Dave Jordan, Supply Chain, CEE, Logistics Management