Supply Chain Blog

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 Foods: Hugh F-W and UK Retailer & Producer Waste

Posted by Dave Jordan on Wed, Nov 04, 2015

Good to see chefy type and anagramists dream Hugh Fearnley-Whittingstall speaking out about the continuing food waste in UK. After the faceless, expenses-hungry suits in Brussels relaxed the laws some years ago retailers have been allowed to vary their acceptance standards for misshapen fruit and vegetables. This has resulted in horrific food waste as shown by the non-pretty parsnip mountain in Hugh’s link above.

I don’t know about you but if I see a potato that looks like a Telly Tubby or a carrot that looks like a pair of knobbly legs with a fake tan or an onion that looks like a light bulb I buy them straight away; no hesitation. My favourite “ugly food” purchase was a spud (aka potato) that looked like Tony Blair. You could tell by the eyes he was lying, again. How I enjoyed making mashed potatoes that day.

Obviously, if your potato or carrot is so misshapen that there is going to be excessive waste involved in peeling the thing then this is far from cost effective. However, the vast majority of misshapen or “ugly” produce is perfectly fit for cooking and eating and surely having a culinary guffaw at the same time is healthy. Cosmetically defect but nutritionally perfect.

In these difficult economic times are we being too rigorous on FMCG/Drinks product quality? Ok, I accept you cannot take any risks with pharma or perishable food quality but in these difficult economic times are companies being unnecessarily rigorous, particularly with packaging defects? There is no debate necessary concerning usage instructions or safety advice but small blemishes would not be noticed by the vast majority of loyal consumers.

I can hear the QA purists angrily stamping their feet and making comments like "over my dead body". They will argue that brand image is paramount and any packaging defects must be wholly funded by the suppling company. Gaining a refund on any particular faulty batch of packaging materials is not really relevant as the supplier will recover the cost from you one way or another. What is worse? Having a product on the shelf with a minor, insignificant defect or no product on the shelf at all?

What about the contents of the packaging; is there any leeway there? Drinks manufacturers cannot possibly QA each unit of sale and in fact wine producers assume a reject rate of 8% due to ‘corking’ – prior to the introduction of plastic corks and screw caps of course. Yes, I questioned that defect rate too but it is correct so your seasonal celebration case of 12 southern hemisphere bottles has an even chance of one with a foul, musty taste.

I just wonder how much money is being unnecessarily wasted at a time when nobody – private or corporate – can afford to lose a penny. No doubt at quarter and year-ends travel restrictions and the freezing of discretionary spend budgets will be rolled again out as FMCG producers try to meet the numbers they “agreed”.

The hot and possibly ugly potato is that they may be missing easier opportunities to achieve their tough targets.

Image courtesy of feelart at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Dave Jordan, Humour, Performance Improvement

FMCG Drinks Route to Market – let’s get fizzical in CEE

Posted by Dave Jordan on Wed, Aug 19, 2015

In a past life I ran the Supply Chain for an FMCG company in the 6 Gulf Co-Operation Council (GCC) countries plus Yemen in the Middle East. The Distribution model was one different legal entity per territory even for the largest market of Saudi Arabia. Within the smaller markets there tended to be one or two stock holding points which were enough to meet demand in a reasonably short Supply Chain. KSA on the other hand had stock holding points in a majority of the larger population centres.

Moving stock around Saudi Arabia as demand fluctuated was often a simple call between the Supply Chain team and the distributor first point of contact. The distributor owned the stock of course and could do as he pleased but this interaction allowed for optimum internal customer service and timely production and replenishment from the factories. This provided a degree of advance warning outside of the formal forecasting system which was very welcome.

As confidence and cooperation progressed, this flexible replenishment process was expanded to cover cross-border assistance. For example, shortages in Bahrain were quickly erased by stock transfer with appropriate paperwork from the distributor in Dammam. This was not a substitute for good integrated business planning with the distributors but when lost sales became a real possibility all opportunities were considered. Sensible stuff but not exactly rocket science!

Anyone living in or around Romania presently will have “enjoyed” a prolonged spell of very hot, dry weather and uncommonly lacking a few end of day cooling storms. All those drinks producers must be very pleased they can avoid an “it was a poor summer” comment in the annual results. Well, this is true if your products are continually on the shelf! No excuses, they must be continually present in front of consumers’ eyes at the precise time they have a raging thirst to slake.

Driving across the Hungary-Romanian border during the heat wave we discussed where to stop for food and much needed drink and decided to cross into Romania as the Hungarian road side service stations all seemed busy. Busy with many people drinking a certain drink and even as we moved on we saw branded trucks arrive to keep stocks moving.

(Aside: Sadly, you leave the good road infrastructure behind in Hungary and any form of transport moves slower in Romania, even the planes! All FMCG producers and distributors would hugely benefit from a half decent road infrastructure.

We needed drinks and the range was wide with all the big names present bar one. This was one brand you expect to find everywhere and every time. The closest you will get to an omnipresent fizzical form in a can or bottle. Shelf empty. Ah ha, the weather is so hot it will all be in the cooler. No. Not there either. (Strangely, nobody had hijacked the prime cooler space, yet......)

Having been involved with drinks Route to Market (RTM) in CEE for several years I was compelled to ask why my fizzy favourite was not available. The simple response was that the distributor did not have any stock. Ok, so why not get some from somewhere else? We can but it cannot get here until after the weekend. I mentioned that you could probably get stock from just across the border in Hungary. Lots of head shaking and nu, nu, nu.

Yes, you would need some paperwork but we are all in the EU so that cannot be difficult, can it?

FMCG_Drinks_RTM_CEE

Yes, you would need to meet labelling requirements but this type of stuff is bottled by a regional giant so both languages are usually present.

Yes, you would need some agreement on transfer pricing so competitive margin positions are roughly maintained but why ever not?

If producers do not get a serious grip on their Route to Market operations and cross-border opportunities then they will lose sales and/or someone will move in and destabilise the market with legal but “grey” imports.

A little more flexibility, pragmatism and entrepreneurship would pay huge dividends when demand is constantly high.

Image courtesy of Chris Sharp at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Dave Jordan, RTM Assessment Tool

FMCG warehouse capacity in Romania: A Short Story

Posted by Dave Jordan on Wed, Jul 22, 2015

The car bounced over the dirt road of potholes and puddles and approached the expansive, looming warehouse building that was once so full of life and bustling activity. Paper and polystyrene fast–food litter gathered up by the breeze blew across the distribution centre parking area to be fought over by bony, mongrel dogs. A short time ago the yard would not be a place for an idle visitor as liveried juggernaut giants and ant-like fork lift trucks toiled away around the clock. Noise, dust, fumes, shouting, revving, the hiss of pneumatic brakes; no more.

Abandoned_Warehouse_Romania_CEEThe entrance to the office building was beyond the waiting room with its familiar mismatched furniture, faint smell of illicit smoke and the accompanying stale odour of tired drivers and their diesel machines. The constant tip-tap of fingers on keyboards generating loading and transport documents supporting someone’s Route To Market had long gone. No more chattering from the tractor printer feeding on green/white paper from a seemingly endless box below. No camaraderie, no arrangements for the weekend, no flirting, no telephones ringing; the only sound was the noticeably slowing tick-tock of the beer-branded plastic clock which in turn would slowly but surely grind to a halt at one precise second in time. The beige IKEA infrastructure unchanged from the last day of productive work.

The previously secure and “authorised personnel only” door into the storage area was propped open by a tightly rolled newspaper with the dusty headline recording the passage of a few years of hope-filled EU membership. Spitting cats scattered rapidly fearing the entrance of their fast-food chasing canine enemies. Dirty yellow fork-lift trucks sat huddled in one corner like juvenile play-ground gossips, connected to chargers that no longer dispensed energy. The once firm, shiny black seats repaired and renovated with stretch-film, tape and cardboard. Names scratched into the truck paint revealing the identities of the long gone jockeys.

No beeping, no screech of rubber and no ecstatic laughing when a pallet falls and spills its liquid SKU load. Once you could not see from one end of the building to the other as hundreds and thousands of cases, drums, IBCs and big bags filled the mega-Meccano skeleton. Now only the blue painted skeleton with orange boots remains taught and proud with the bumps and bruises of battle visible on the lower levels and a scattering of splintered wooden pallets, also blue.

The loading bays all had their shuttered mouths firmly closed to the outside world. Would they be ever be prised open again to receive and dispatch FMCG goods like foods, detergents, drinks and wine? For now the loading bays only received the attention of endlessly sweeping flocks of pigeons and what they generously leave behind.

The rusty padlock and chain were replaced with a dull clunk and the warehouse was empty again and for how long this time? The dogs chased the litter; the cats produced a litter and the pigeons left their telling statement on a once thriving warehouse in Romania.

 Image courtesy of artur84 at FreeDigitalPhotos.net

Tags: Brewing & Beverages, FMCG, Dave Jordan, Supply Chain, CEE

FMCG: Costs and Supply Chain Excellence

Posted by Dave Jordan on Wed, May 27, 2015

I recently had a lengthy discussion with someone from the UK Armed Forces who was preparing to lead his men into a dangerous part of the world. I enquired about the logistics of delivering people, arms, ammunition and machines to the right place at the right time. Running out of anti-dandruff shampoo may prompt you to select a white shirt in the morning but running out of bullets when under fire provides a very different challenge.

FMCG_Supply_Chain_Army-1

Taking bullets as the focus. Getting bullets to the front and keeping up the supply lines must be an incredible logistical task which simply cannot fail. Just imagine, no weekends or bank holidays to allow the supply chain to catch up or regroup. All FMCG supply chain people will have all had the dubious privilege to call Metro or Asda or Tesco to say “sorry, we are out of stock on Bloggo Powder but it will be with you on Tuesday”. The supply chain in an active military deployment must be a super-slick Rolls-Royce of an organisation……..not!

Well, actually my friend rated the quality of supply chain in the military as ………. Yes, you can probably guess the short but not so sweet military technical term used. Quite simply, the military supply chain does not have to make money or deliver savings nor is it measured against customer service at the often dusty location of a fire-fight. They are tasked to get stuff from A to B and get it there they must or the consequences are potentially lethal. Consequently the military spends far more than is necessary in civilian life to achieve the similar objective of moving stuff around.

FMCG, Brewing and Pharma companies find it hard enough to forecast what domestic consumers will eat, drink and slap on their skin on a daily basis. Compare that to how many bullets are needed or what volume of diesel fuel is required or how many tank tracks are going to be ripped off. If military forecast accuracy and stock levels were the subject of KPIs then the turnover of supply chain people would be very high. So, cost in a military environment may not receive close scrutiny but in FMCG, Brewing and Pharma it certainly and rightly does.

This leads me to this thought. In the relatively mundane field of soaps and shampoos, beer and Bollinger, tablets and tonics, does cost excellence deliver performance excellence or is it the other way around……..?

 

Image courtesy of Surachai at FreeDigitalPhotos.net

 

Tags: Brewing & Beverages, FMCG, Dave Jordan, Forecasting & Demand Planning, Inventory Management & Stock Control

FMCG Traditional Trade Distribution: A letter to the Drinks Agony Aunt

Posted by Dave Jordan on Wed, Apr 15, 2015

Dear Drinks Agony Aunt,

I have reached the end of my patience. I’m drinking too much coffee, too much beer, I smoke like a chimney, I’m not eating properly and I just cannot sleep. I have not managed to watch or play any of my favourite sports and now even my kids call me Uncle Dad as I spend hour after hour at work. At times, a short step off a tall bridge without a bungee cord does not seem such a bad idea. These drinks Distributors are killing me. Literally!

FMCG Drinks Distribution Agony resized 600The world’s greatest drinks salesman is glowing bright yellow in the sky. Consumers are literally gasping for drinks yet we cannot get our products onto shelves and into coolers. We have given the Distributors some very focused incentives and we are spending thousands on quirky TV adverts with that irritating guy with the funny hair. There is no doubt our brand awareness is right up at the top level yet we just don’t sell as much as we could and should!

When the weather is this hot, consumers want a drink when they are thirsty and not when Joe Egg the Distributor can be bothered to turn up in his smoke belching van to replenish stocks. If our product is not sitting invitingly in a cooler the thirsty masses simply take an alternative product. Consumption is immediate, I have lost a sale and this drives me madder than Brian Mad of Madcastle.

Please, please help me. Tell me what I should do before I lose even more of my hair.

Yours,

Frustrated of FMCG Drinks

......and the answer.  

Dear Frustrated of FMCG Drinks,

Thank you for your letter, which was a delight to read. Believe me; you are not alone in having such feelings and concerns. There is nothing worse than seeing the world’s greatest drinks salesman shining down and not being able to meet the demand of the thirsty masses. This frustration plus the lack of return on valuable investment can leave even the calmest of souls agitated and depressed. However, do not despair. As I said you are not alone and this is not the first time I have seen this problem. You need professional help to receive the Route To Market/Distribution therapy you need.

Firstly, you must overcome 2 important barriers. The first is that you cannot assume your existing Distribution network is entirely suitable for the job in hand. Secondly, you must look at yourself in the mirror and realise that you are not perfect either. If you can do these 2 things then help is at hand.

Using this simple checklist and guiding definitions you can take a critical look at how you manage your Distributors and how they manage your business on your behalf. Some of the questions are searching and may cause you some discomfort but this is necessary in order to accurately evaluate what is going well and what can be improved.

Do not keep this to yourself. The effective management and exploitation of a robust and proactive Distributor network is a team effort requiring buy-in from all Board colleagues and peers. Keeping this problem to yourself will only increase the caffeine/beer intake and accelerate the hair loss!

I will always be pleased to help you and look forward to your feedback on a very positive experience with the checklist. Cure the problem, do not treat the symptoms!

Yours in a soothing, calming tone,

The FMCG Drinks Agony Aunt

Image courtesy of Stuart Miles at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Dave Jordan, Traditional Trade, Distribution, RTM Assessment Tool

FMCG Stock Shrinkage happens in the best run operations, even yours!

Posted by Dave Jordan on Wed, Aug 13, 2014

My colleague Stefan Cucu recently wrote on the subject of stock shrinkage in coolers located in HORECA outlets in Romania. One of the points he made warned Supply Chain professionals about the likelihood of stock shrinkage anywhere along the chain.

The term “shrinkage” covers a multitude of incidents but all inevitably lead to missing stock, extra cost and ultimately, poor customer service. If you and your systems think stock is available and you provide a promise to customers then finding (or not finding) missing pieces/promotional premia/cases/shrink-wraps and even pallets will not leFMCG Stock Shrinkage Sources resized 600ad to a “Happy Bunny” situation.

Here I take a look at some of the common and some of the more unusual causes of stock shrinkage.

At the factory

Apart from getting the standard QC/QA checking spot on, factory personnel should have a close look at their rubbish. Any packaging that is wasted should be 100% destroyed and factories should think carefully about sending waste to anyone other than a very honest recycler. For example, any bottles that are potentially usable can be filled with water and swapped for filled bottles along the supply chain. Yes, I have seen this happen!

At the warehouse

A minefield full of potential shrinkage opportunities. Routine cycle counting will alert management to any variances and ensure stock available to promise is really available but you should adopt the “trust is good but check is better” approach. Ensure you have clear segregation of duties so no individual has the access and authority to book stock in AND out. Monitor the relationships between operators and security personnel and rotate security shifts to avoid any “comfortable arrangements”. Although it is a pain, I would also rotate third party security companies on a regular basis. Keep an eye on damage levels too as they can always be used to substitute for good stock when backs are turned.

In the delivery truck

Installation of tachographs and Sat Nav systems have helped to minimise shrinkage during delivery but where there is an ill will there is a way. Did the driver sign off on what was actually loaded? If not, there is the opportunity to stop and remove a few cases from the inside of pallets which is not immediately obvious to the naked eye. Keep an eye on Sat Nav routings and any unexplained idle time.

On the customers delivery dock

You may have reached thus far with 100% load integrity but you are far from safety and a signed 100% OTIF delivery note. On one notable occasion when I was a Supply Chain Director in the FMCG sector a certain big name retailer continually reported shortages. Now, nothing is ever 100% perfect but when they started complaining about non-receipt of full pallets I smelled a bit of a rodent. A personal close inspection of the unloading process saw the driver sent away to an inside office to get documents stamped. While he was away the customer dock operators calmly took 2 pallets from the load and hid them in a nearby electricity building. When the driver returned he was completely powerless and could do nothing but sign against a shortage.

In the retailer outlet

No, not finished yet! In addition to the RTM drinks cooler caper described by Stefan, shrinkage can occur in store and not just through shop-lifting adventures. If you do not attach your promotional premia to the host sku securely they will be removed. Unscrupulous retailers will “ramp” the free product or item thus destroying your FMCG promotional activity but increasing their revenue. If the item being promoted is not available in the same store, e.g. a pen, then you are simply giving it away to anyone with enough nerve to slide it into a pocket.

That is just a snap-shot of what can go wrong as the possibilities to shrink your top and bottom lines are endless.

Image courtesy of Stuart Miles at freedigitalphotos.net freedigitalphotos.net

Tags: Customer service, Brewing & Beverages, FMCG, Dave Jordan, Performance Improvement, Supply Chain, Logistics Management, Inventory Management & Stock Control

Supply Chain Insight: FMCG Drinks Stock Shrinkage

Posted by Stefan Cucu on Wed, Aug 06, 2014

Today we see a lot of writing about Supply Chain. Technology is advancing rapidly and we are seeing changes almost on a daily basis; progress is simply enormous. However, some things never change and this is what I discuss here – things that never change.

I am not going to tell you about anything difficult. What I mentioned above is as old as humanity but all too often forgotten. True, such things are not usually directly addressed by our business as they relate to common sense only but as we know, common sense is not that common! Of course, I can only approach this from a personal perspective as everyone is entitled to their own opinion.

Today's Topic: "Yeah man, we steal here!"

This is without any doubt one of the most powerful insights that I have been offered in my Supply Chain consultant career. Once upon a time, when I accompanied a sales rep on his route in a Route-to-Market (RTM) project, I visited a certain street in the southern Romania district of Giurgiu. The day was beautiful, the sun was shining and spring had finally arrived. I do not remember how many stores we had already visited, it was a typically busy day in multi-distributor RTM project. Despite the technology progression I mentioned earlier we had printed forms to complete as PC Tablets were still too expensive. I felt that, apart from the spring-like weather, the day would turn outquite boring.

The sales agent was visibly annoyed by me, as I marked several x’s and far fewer stars on my printed forms. He was wondering, what on earth do keep scribbling there? Well, I said, I have to write down whether I find any products in the refrigerator that are from the competition or even a different sector. “Aha, let me take you somewhere that you will remember for your whole life”, he said. And he was correct, I still remember to this day.

FMCG STOCK SHRINKAGE THEFT resized 600We went to one of the HORECA outlets, essentially a pub which was very crowded and full of people, noise and smoke. The pub also had a cooler provided by the sales agents company. Do believe me, that refrigerator was the most beautiful thing I had seen throughout the project. It was flawless, arranged exactly as it needed to be, with the premium and expensive products nicely placed on the top shelf at eye level, the products which his company tried so hard to sell and promote. In the cooler there was no trace of competition; excellent, this was simply divine. I would have gladly taken a “selfie” with the cooler and post it on Facebook but I figured out a tiny problem - a huge padlock.

Nobody could use the cooler. Was it just for decoration? The agile waitress was very busy, serving the customers by bringing them their selected beverages from the back room. At first, she did not understand what the long-face guy wanted from her (it was I, obviously baffled), but then exclaimed, “Well, I tell you, I can’t even leave the cooler open for ten seconds, the customers will steal everything”. Right, so it is, confirmed the agent, these guys steal everything!

Then something incredible happened: the buzz in the room stopped, like in old films the piano stopped playing and everyone was looking at me. A customer from a neighbouring table wearing a nice sailor T-shirt, showed me his broken and blackened teeth in a large, no, huge smile and exclaimed “Yeah man, we steal here!” Then obviously, everyone started laughing. And they laughed…

Half joking? Half serious? This is a warning to those who operate in traditional trade HORECA outlets – your products are being stolen or at least permanently borrowed!

While these drinkers were every honest about their dishonesty it is likely this is happening along the Supply Chain. A Supply Chain Manager surely needs to know the technical stuff but they also have to have a nose to sniff out where shrinkage is occurring.

Whether you signed a contract that can bring you personal benefits, no matter how large these benefits are, whether you favour suppliers or clients for reasons known by you only, or whether the stocks simply disappear from the company's warehouse - this is still called theft and eventually someone has to pay for it. Moreover, as a Supply Chain Manager you should be the first to know that something is going wrong and certainly before the Controlling or Audit department and certainly before any external legal involvement.

ERP, WMS, TPS, or BI, APO, MRP and the rest are excellent systems and procedures but they all fail if the phrase applies which my good old sailor friend from Giurgiu enunciated so well: we steal here!

Sometimes it’s that simple why you are losing stock and suffering expensive stock counts!

Image courtesy of chanpipat at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Route to Market, Stefan Cucu, Traditional Trade, RTM Assessment Tool, Inventory Management & Stock Control

FMCG - Here comes summer, is your drinks RTM ready for the sun?

Posted by Dave Jordan on Wed, Jul 02, 2014

Improve Beverage DistributionSummer has finally reached Romania and this will be good news for all the beer, water and soft drinks producers. Nothing raises sales like a scorching yellow disc in a clear blue sky.

One of the classic summer tracks is Here Comes Summer by a variety of artists depending on your age. When you hear this song it is a sure sign summer is approaching and if you want to sell your drinks you had better be ready!

With reference to the original piece by Jerry Keller.

Here comes summer
The sun is out, oh happy days
Here comes summer
The peak for drinks is on the way
If we’re winning
Our sales will rise right away
Will the sun shine bright on our happy summer sales?

Here comes summer (here comes summer)
Almost June, the sun is bright
Here comes summer (here comes summer)
The drinks market will be tight
It's the toughest (here comes summer)
So little time to get it right
Will the sun shine bright on our happy summer sales?

Distribution’s not so bad but it could be better
They need close attention to make it to the top
Assess your route to market and do it soon
If we miss, our drinks sales will surely drop

Here comes summer (here comes summer)
Don’t let your competitor sales outshine
Here comes summer (here comes summer)
Whether it’s beer, soda or wine
Make it the greatest (here comes summer)
Drinks season of all time
Will the sun shine bright on our happy summer sales?

Image credit: raichinger

Tags: Brewing & Beverages, Route to Market, Dave Jordan, CEE, Traditional Trade, Sales, Distribution, RTM Assessment Tool

FMCG Beer stock outs and the Otopeni airport baggage carousel

Posted by Dave Jordan on Wed, May 28, 2014

Quite a bit of travel recently with a trip in each of the last three weeks. Regular readers will be aware I do not particularly like flying these days, not out of fear but simply the hassle of getting onto a plane. I am now down to simple trainers, no belt, no watch yet I still beep occasionally at the metal check point before being introduced to the metal security sausage.

The most recent adventure involved a transfer in CDG Paris - who on earth thought out the people logistics on that one? If you have to transfer terminals at CDG then remember to take a packed lunch and make sure your passport has plenty of validity. Arriving back to base in Bucharest I waited to collect my bags at the carousel with all the other CDG’d passengers. The time was after midnight and inevitably passengers were tired but I noticed something weird. A fellow passenger whom I know was obviously looking for a red suitcase as he proceeded to check several against the luggage tag stuck on the back of his passport.

To be fair the bags were all varying shades of red and similar in size but he was obviously having great difficultly finding his own property. Aha, success! The tag numbers appeared to match and my fellow weary traveller pulled off a yellow case……Now, he is possibly colour blind, a thief – no he’s not by the way – or he simply selected the wrong case.  An honest mistake perhaps, but one that could see him at his business meeting the following morning in pink latex rather than a dull suit. (Yes, he has a beard so he could then be a contender for the Romanian entry at Eurovision 2015.)

beer stock out bar fmcg resized 600Fast forward to a well-known bar in Bucharest which shows all the major football games. Despite the place being packed out my domestic senior manager and I secured seats at the bar right in front of the beer pumps. This was one of those large gold coloured metal pumps which is raised off the bar and serves 5 different beers from a big name brewer. Straight a way we noticed a glass over one of the pumps indicating a stock out but no problem there were 4 more choices, but not for long. Next to go was the unfiltered or “cloudy” beer. No great loss there from our perspective but as half time approached the dark version of our preferred beer went dry.

Soon the flagship beer brand ran out in a mist of coughing and spluttering foam. This left just an expensive imported beer and like my friend at the airport it was time to take what was available even if it was not actually our usual beer. Get what you can before it all disappears!

How can the extended beer supply chain fail so dramatically at a city centre bar where Premier League games are shown every week to a packed crowd? I hope supply will be robust by the time the World Cup starts, at least for England’s three games!

Image courtesy of ahmet guler at freedigitalphotos.net

 

Tags: Brewing & Beverages, Dave Jordan, Humour, Supply Chain, Inventory Management & Stock Control