Supply Chain Blog

Learn the 10 Steps to Make S&OP Work in Mobile Telecoms

Posted by Michael Thompson on Fri, Jul 22, 2011

 

In my blog post Reasons for establishing S&OP in Mobile Telecoms, I recounted a success story of S&OP in a mobile telecoms company.  I then went on to discuss the principles of S&OP design in the post Learn the 8 Basic Principles of S&OP in Mobile Telecoms.

My discussions with Colin, our Mobile Telecoms Executive, continued.  Colin is a Senior Executive with a mobile telecommunications company with operations in several markets in Africa.

We started talking about the nuts & bolts of how S&OP could actually work in a mobile telecoms company. 

We designed the outline of an S&OP process including with a regional supply chain and operational structure in mind.  Diagrammatically the design we came up with was as follows:

S&OP Process for  Mobile Telecom

The process commenced with input from the regions within the country – we called this regional S&OP.  The demand review considered inputs from local marketing activity and the regions; the forecast also considered trade data. 

The supply review considered two main series of activities. The supply plan and product purchase plan considered the provision for mobile handsets and other items sold in the local market (NB some markets also used scratch cards that sold airtime). A network plan and equipment purchase plan looked at the supply needs to maintain the network.

Following a financial evaluation of the demand and supply plans, a national pre-S&OP consensus meeting was undertaken. The process concluded with the monthly S&OP meeting to agree the plans.  Following this demand execution and supply execution processes put the plans into action.

As it happened the design was similar to the one that Enchange has used in the past with mobile telecoms companies in African markets.

Let’s see if it does the trick for Colin.

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Learn the 8 Basic Principles of S&OP in Mobile Telecoms

Posted by Michael Thompson on Fri, Jul 15, 2011

In an earlier blog Reasons for establishing S&OP in Mobile Telecoms, I recounted a success story of S&OP in a mobile telecoms company. Reasons for establishing S&OP in Mobile Telecoms.

I continued my dialogue with the Senior Telecoms Executive – let’s call him Colin.  His company operates in several markets in Africa.

S&OP in Mobile TelecomThe challenge we set ourselves was to design an S&OP process for a mobile telecoms company.

In the first instance we explored some of the basic features of S&OP. 

Mike: Do you remember how we started in your last organisation?  (Colin used to work for an FMCG multinational in Africa.)

Colin: I seem to remember we started with some principles.

Mike: Exactly.

Colin: So what are the basic principles of S&OP in mobile telecoms.

Mike: To a great extent the same basic principles apply in mobile telecoms than they do in any other type of business.

Colin: How can that be? Mobile telecoms is an entirely different business.

Mike: You are confusing process design with basic principles.  While the design of S&OP in a mobile telecoms business is different, the basic principles still apply.

We then spent some time discussing the basic principles of S&P in any business and tested these assumptions in mobile telecoms.

Here is the list of 8 Basic Principles of S&OP in Mobile Telecoms:

  1. S&OP is a collaborative cross functional process that engages all functions to produce an integrated set of plans that all are committed to support. 

  2. The plans cover a sufficient time horizon to enable resource planning & support the annual & strategic planning processes.

  3. Its purpose is to balance demand & supply in the supply chain. 

  4. It is performed periodically – monthly or weekly.

  5. It aligns operational plans to high level business & strategic plans.

  6. It can be implemented at a market, regional or global level.

  7. At its core is a single set of numbers for the business.

  8. It uses standardised processes, calendars of events & meetings &  KPIs.

There then followed a further discussion about the design of S&OP in mobile telecoms. 

I will; discuss this in a later blog.

S&OP in Mobile Telecom in Africa

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Reasons for establishing S&OP in Mobile Telecoms

Posted by Michael Thompson on Fri, Jun 17, 2011

I have two recent stories to tell.

Story 1

Recently I was chatting to a Senior Executive in a mobile telecommunications company. We first met about a decade ago when he was the Supply Chain Director for an FMCG multinational in Kenya.

S&OP in Mobile TelecomThe conversation was comparing his former life in FMCG to his current life in a mobile telecoms company. I should mention that the FMCG company was a mature business and the mobile telecoms company is a relatively new and growing business.

To paraphrase, it could be summed up in one of his expressions "The energy is great. But I could do without the chaos."

This compares to the relatively stable and predictable working life he remembered from his previous FMCG position.

I should also mention that one of the reasons for this ‘stability’ was that Enchange had implemented S&OP in the FMCG company – that is how we first met.

We reminisced.

“Do you remember when things were also chaotic before? And do you remember how we sorted it  out?”

I continued “Have you ever thought of implementing S&OP in your mobile telecoms company?”

“S&OP in mobile telecoms?  Does it work?”

Story 2

I have just returned from DRC (Democratic Republic of Congo) and met up with a former client manager - she now works for Enchange as a consultant.

In her previous position she was an operational manager and worked on an S&OP project that Enchange implemented in the company. It was a mobile telecoms business.

I asked her if the project had delivered the results that were expected and the extent to which the change had been sustained.

Her reply was revealing.

“Everybody was sceptical at the time the project was implemented. However it ended up transforming (her word, not mine) the way the business was run.”

I asked her to explain. The key difference was that consensus and order had over time replaced bitter argument and chaos.  However, the energy of a new and growing business remained.

“We got the best of both worlds”.

And the moral is?

I mentioned this story to the Senior Telecoms Executive.

Having not even considered S&OP, we are now actively discussing how S&OP could work in his new company – a mobile telecoms business.

More later.

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Supply Chain Blog Enchange Oscars - and the Winner is...

Posted by Michael Thompson on Tue, Mar 08, 2011

Lest we were caught up in the furore of the Hollywood version, it is now time to announce the winners of the inaugural Enchange Supply Chain Blog Oscars.

Without further ado:

  1. Best Route to Market Blog – goes to Evaluate your FMCG Route to Market Distributor Network
  2. Best Sales & Operational Planning Blog – goes to Top 6 Critical Success Factors of S&OP in Africa
  3. Best Supply Chain in Africa Blog – goes to The Challenges of FMCG Supply Chain & Route to Market in West Africa
  4. Best Supply Chain in Central & Eastern Europe Blog – goes to 7 Ways to avoid overstocking FMCG distributors in CEE
  5. Light Entertainment Category – goes to The Top 10 Smash Hits of FMCG Route to Market Distribution
  6. Best Adaptation of a Supply Chain Theme – goes to Santa & Opening Presents - Why S&OP is Invaluable at Christmas

And finally:

Supply Chain Blog of the Year is Top Ten FMCG Supply Chain New Year Resolutions for 2011

Thank you to all our readers who have voted.  Enchange has made a donation of GBP 1 pound to our supported charities in Kenya & Romania.

supply chain blog oscar 2011

Tags: FMCG, Route to Market, Humour, Michael Thompson, CEE, S&OP, Doing Business in Africa

Top 6 Critical Success Factors of S&OP in Africa

Posted by Michael Thompson on Thu, Feb 17, 2011

I have been delighted by the response to my recent blog on the 11 critical success factors in Route to Market programmes.

One comment in particular has inspired this week’s blog.

It went along the lines of "we are about embark on an S&OP programme in Africa and want to understand if similar critical success factors apply."

The short answer is that some do & some don’t. 

Success factors of S&OP implementation in Africa

So here is the Top 6 Critical Success Factors to consider when implementing S&OP Programmes in Africa:

1. End Market (EM) Commitment & Ownership:

  • End Market Senior Management – all of them - need to be convinced.  Generally they are sceptical about such programmes that originate from HQ.  Time spent doing this properly is always time well spent.
  • The CEOs/GMs can make or break the programme; the success of S&OP is directly proportional to the commitment & ownership shown by the CEO.  It is not a supply chain programme.
  • Programmes need a ‘sell’, NOT a ‘tell’ approach.
  • End Market operational team engagement is always critical but will not happen if CEO buy-in is below 100%
  • The initial message from HQ will be very important in establishing realistic expectations.

2. S&OP Process Design (assuming a standard S&OP Design):

  • Standardisation – key is establishment of the ‘S&OP Template’ of key processes (e.g. SCOR Levels 1, 2 & some 3) with local End Market adaptation within ‘reasonable’ boundaries.  Keep the ‘rules’ robust and to a minimum.
  • Level 3 Design – use some End Market development as an opportunity to develop local ownership with local teams.
  • Keep it simple for Op Co execution.

3. People & Management of Change:

  • Most S&OP programmes involve significant change.  Ensure that as a minimum, the following are addressed in some way: 
  • Create a change management strategy - start with readiness assessments;
  • Engage senior managers as sponsors of the change;
  • Ensure communication develops a strong message and awareness of the need for change;
  • Involve people through the transition including by workshops in the design and implementation stages;
  • Ensure ample education & training to support the change;
  • Measurement & Reward - gauge progress (e.g. KPIs), reward appropriate behaviours (e.g. bonuses) and reinforce (e.g. award schemes) to sustain the change.
  • Avoid excessive delay (for any reason) – people will lose interest.
  • Above all, appoint a dedicated Change Manager.

4. People & Culture:

  • One size does not fit all in Africa & Middle East.
  • Any S&OP programme must be adapted to account for the local business culture.  Failure to do so will likely be disastrous – I have seen many examples.

5. Information Technology:

  • S&OP should not be an IT led project.
  • But the business & financial success of the programme is usually directly proportional to supporting ERP (e.g. SAP) effectiveness, planning tools, data capture and master data management.
  • Consider interim IT tools – these can work extremely well & maintain programme momentum before the full IT solution is implemented.

6. Measuring Performance & Managing for Success:

  • Decide programme outcomes in advance.
  • Decide what is not negotiable.
  • Be prepared to learn and adapt during the programme.
  • Use established Project Management methodology (e.g. Prince 2 – a ‘Lite’ version please) – plan, review etc.
  • Establish KPIs – consider a Balanced Scorecard.
  • Indicate the benefits early.
  • Build End Market success into CEO/GM/Board bonuses.

I have focussed on our experience from S&OP programmes in dozens of African countries.  Upon reflection, the above also apply in varying degrees to S&OP programmes in other parts of the world; I would welcome your views.

If you are wondering if you need S&OP in Africa, I wrote about this last year in an article - Doing business in Africa - 11 signs that your S&OP needs improvement.

And of course, if you need any advice, including on an informal basis, please just contact us.

PS

If you are interested in S&OP, you may also be interested in some other Enchange blogs:  Many are light hearted. 

Oscar Supply Chain Blog

Tags: Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Doing business in Africa - 11 signs that your S&OP needs improvement

Posted by Michael Thompson on Fri, Oct 29, 2010

“We’ve been doing S&OP in our African Operating Companies for 5 or 6 years .... & it’s still not working properly....”

This was one of several discussions we have had with clients over the last couple of weeks and something of a recurring theme.

Although many of the countries in Africa present unique challenges, the principles of S&OP are the same as anywhere else.

A good place to start is looking at organisation capability and the outcomes that S&OP should deliver.

So here are 10 (plus 1) questions to consider:

  1. Customer service. Are your customers enjoying consistent & excellent service levels?
  2. Planning Processes.  Do your supply chain planning processes deliver optimum levels of service & cost?
  3. Inventory.  Do you have full visibility of stock & are inventory levels at or below best practice industry standards?
  4. Logistics & Route to Market.  Is your distributive supply chain a source of competitive advantage?
  5. Measures & Performance.  Do your KPIs quickly identify performance opportunities & guide corrective intervention?
  6. Decision Making.  Is decision making proactive & at the correct level in the organisation?
  7. Competency.  Are your people fully able to manage the demands of your supply chain?
  8. Data.  Do you operate your supply chain with one set of numbers?
  9. Systems.  Are your IT systems fully optimised to support your supply chain?
  10. Cost.  Are your total supply chain costs at or below best practice industry standards?

And in a world with limited resources:

 11. Low Carbon.  Does your supply chain have the lowest   possible carbon impact?

    If you have answered “yes” to all of the above, you have fully functional S&OP process that supports an optimised supply chain.

    If you have answered “no”, there will be clues to begin the process of improvement.

                                            ***

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    Tags: Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

    The Challenges of FMCG Supply Chain & Route to Market in West Africa

    Posted by Michael Thompson on Thu, Oct 21, 2010

    I have been thinking about Africa this year & its particular needs regarding supply chain.  We have been working there since 1993 & it came back into consciousness during the World Cup.

    Many African countries are growing rapidly.  However, I have been hearing a lot of stories about significant constraints to growth, many of which are related to poor supply chain processes & practices.

    With this in mind we decided to visit West Africa & talk to someWest Africa FMCG Supply Chain and Route to Market leaders in the FMCG sector.  The focus of our visit was “current issues that are impacting supply chain performance in Fast Moving Consumer Goods (FMCG)”.  We spoke to a number of leading FMCG organisations and 3rd Party Logistics Providers.  What we found confirmed some of our suspicions.

    1. Distributor Performance.  Poor performance of Distributors and Transporters is causing low levels of customer service and excessive Route to Market costs.   Although there are factors that Producers cannot influence, notably poor infrastructure, there are many ways in which Distribution and Transportation standards can be significantly improved.
    2. Improving Distributor Performance.  All companies we met were looking at improving distribution and transportation through improving current processes and systems.  However, only one company was looking to do something completely different and tear up what was happening now and provide a completely new way of doing things.
    3. Logistics & 3PLs.  Some companies operated with owned warehouses, distribution centres and trucks and were not sure whether this was the best option.  Some were actively considering using 3PL partners.  However, they were unsure of the timing and were worried about the professionalism and capacity of potential 3PL partners, and the risk of a possible drop in customer service standards.
    4. Growth & Supply Chain Limitations.  All companies stated that they were experiencing market growth of between 8 - 14% but this did not translate into a corresponding level of increased profits due in part to excessive supply chain costs. For all companies a key issue was to review all areas of the supply chain for ways to improve productivity, customer service and reduce supply chain operational costs and capital invested in the supply chain. One common issue was the large amounts of finished goods held by the manufacturer compared with the relatively low levels of finished goods stocks held by the Distributor.
    5. S&OP.  All companies were operating S&OP at some level but reported not to the levels of discipline and standards required to utilise the process as the company´s one operational planning process utilising ‘one set of numbers’. There was a common need to re-launch S&OP in a new ‘Lite’ format that can be more aligned to the working culture of the region providing:
      • Improved use of IT and more standard reports available from ERP
      • Reduced and more focussed S&OP meetings
      • More discussion and focus on exceptions rather than regular issues
      • Improved accuracy of demand planning
      • Integrating Distributors within the S&OP process
    6. Planning.  Poor forecasting and demand planning is causing production planning issues by continuously changing production plans on a weekly and sometimes daily basis. Production Planning tools were generally felt to be inadequate and either not available within the ERP system or used stand-alone spreadsheets and manual workaround solutions

    Although we have based these observations on a relatively small sample of visits, we would like to hear what other companies in the region are also experiencing. 

    Oscar Supply Chain Blog

    Tags: FMCG, Route to Market, Michael Thompson, S&OP, Forecasting & Demand Planning, Logistics Management, Distribution, Doing Business in Africa

    New Opportunities in Route to Market (RTM): Manufacturers in Nigeria

    Posted by Keith Marshall on Tue, Oct 19, 2010

    Route to Market (RTM) is a term used for a series of innovative approaches to a manufacturers supply chain that encompasses all processes and activities dealing with Finished Goods (FG) .  Traditionally these processes have been identified as Secondary Supply Chain, Distribution and Trade Marketing among others and when you consider that when companies were managing this key part of their supply chain found that 30-40% of labour costs and numbers were attributable to this area of operations.

    In the 90’s the view that “all non core activities were not the main business of the manufacturer and “we do not have the skills” led to manufacturers appointing Distributors as third party providers to take over this crucial part of their business.   In most countries with mature markets manufacturers have developed successful partnerships with their Distributors and would see this major change in business practice has led to competitive advantage resulting in improved customer service, reduced costs, increased sales and market share.  However in less mature markets the same positive results have not been so easily found due to poor standards of Distribution Partners and the general lack of infrastructure of these countries.

    Nigeria route to market At about 150 Million people Nigeria is the most populated and due to its oil revenues potentially richest country in Africa with one in six Africans a Nigerian and over half of West Africans a Nigerian.  Nigeria has the largest consumer goods market in Africa and in Lagos one of the largest cities in Africa with plans to be the “Singapore” of Africa.

    Clearly there is a massive market and opportunities for profits and growth for manufacturers in Nigeria in the present and future.  However success does not come easy in Nigeria as operating conditions are equal to some of the most difficult in the world.  Companies face an extremely daunting task trying to implement modern supply chain solutions and achieve customer service targets in a market with a low maturity level and a crumbling infrastructure that is going to take billions of Naira to improve.  Route to Market (RTM) manages the critical supply chain processes from the Factory Finished Goods to the Customer and develops a case for the selection, development and retention of local Distributors who act as partners to the Manufacturer in delivering a cost effective and customer centred RTM customer service solution.

    Successful RTM customer service solutions begin with the careful selection of Distributor Partners where new selection criteria and assessment models are delivering a high level of Distributor recruitment and retention.  Integrating Distributor partners into the business are seen as a critical part of RTM and the Distributor’s development and continuous performance improvement.  IT is a key area of integration and the use of the rapidly expanding mobile phone network to enable real time sales and inventory information is making massive improvements in customer service and savings in inventory in trade and reducing stock shortages.  Integrating Distributors input to the S&OP process is improving demand planning trough to finial production planning bringing high levels of savings.

    Distributor Partnership models are many and varied but all have the key objectives of making the Distributor feel a real part of the business and raising the standards of professionalism and business performance.  Funding models designed in association with banks to assist local Distributor development of warehousing, vehicles and IT is an ongoing support service that is placing Distributors on a sounder footing and enabling longer term planning and relationships to be developed to the benefit of Manufacturer and Distributor.

    The blogger is a senior consultant with Enchange specialising in workable supply chain solutions for African companies.

    ***

    Doing business in Africa? Get our free whitepaper to learn the P.R.I.C.E. of success in Africa.

    Oscar Supply Chain Blog

     

     

     

     

     

    Photocredit: zouzouwizman

    Tags: Route to Market, Distribution, Doing Business in Africa, Keith Marshall

    Supply Chain Project Management in Africa:is Africa really different?

    Posted by Dianna Vorpagel on Thu, Aug 05, 2010

    Once you have arrived at the office to start your new project, with a new management team and a new project team, many things about successful project management are the same all over the world.

    • Top management support is essential
    • Communication, communication, communication
    • Willingness and ability of the involved teams
    • Client ownership of project
    • Effective change management
    • Sound Project Management methodology, including
      • Clearly defined and well understood project deliverables
      • Identification of risks/issues with mitigating actions & resolutions
      • Involvement all stakeholders as much as necessary to ensure complete buy-in at all levels of the company throughout the project
      • A well developed, realistic plan, built with the team
      • Measurement of progress
      • Report on progress at agreed intervals and deal with issues immediately

    Where local experience becomes valuable is in dealing with some of the testing situations like intermittent electricity, slow internet, limited telecoms, transportation difficulties (go-slow traffic can take hours!!!), various forms of corruption and so on; and it’s always a surprise which combination you will encounter on any given day!  

    A successful Project Manager in Africa needs to be flexible, creative and innovative to overcome the various barriers to success that may come their way. 

    Before you reach the office, the daily challenges in African countries can present their own variety of “interesting” events that make for great story telling... later!!

    Project Management in Africa

    Dianna Vorpagel is a Supply Chain Consultant & Project Manager with broad supply chain, IT, operations, finance and accounting experience. Her international experience has been with a large number of multinational companies. She has worked as Project Manager for various international IT implementations and supply chain improvement projects including in Africa, CEE, West Europe, Australasia, North America and the UK.

    Image credit: stck.xchng

    ü  Clearly defined and well understood project deliverables

    ü  Identification of risks/issues with mitigating actions & resolutions

    ü  Involvement all stakeholders as much as necessary to ensure complete buy-in at all levels of the company throughout the project

    ü  A well developed, realistic plan, built with the team

    ü  Measurement of progress

    ü  Report on progress at agreed intervals and deal with issues immediately

    Tags: Doing Business in Africa, Dianna Vorpagel

    Viva Africa United :World Cup Business Improvement

    Posted by Michael Thompson on Tue, Jul 13, 2010

    Well its over & the African showcase that was the World Cup has finished.  As Spain (deservedly) celebrates and the circus leaves town, I am left to wonder “what next” for the continent?

    Viva Africa UnitedThankfully I am not the only one in a similar reflective mood.  David Smith considers LAWC (Life After the World Cup) in the Guardian.  His article includes reference to this being a “transformative moment” on par with the release from prison of Nelson Madela.  He also cautions against premature optimism.  This is wise.

    My musings, my concerns are somewhat broader. 

    In the aftermath of a dismal England exit, I was in a similar reflective mood.  It was something of a “what has the World Cup done for us” moment as borrowed from Monty Python’s Life of Brian.

     

    I return to my first World Cup blog, “Africa, the World Cup, & Supply Chain – what’s the connection?”. It will take many generations for Africa to reach “a ‘tipping point'; the point at which Africa emerges into an economic block that the world has to take seriously. A transition from recipient of sympathy and aid to proud and able wealth.”

    So now that the show has left town, how will things change for most South Africans & Africans? How will their lives have been enriched?

    I remain an ‘Afro-Optimist’, of the glass half full persuasion.  As the attention of the World Cup fades, I believe that the collective conscience has been changed for good & forever.  Our South African hosts have, I believe, left a positive legacy for the continent.

    And fittingly this was reflected in a banner at the end of Sunday’s final that read “Viva Africa United”.

     

    Photo credit: babasteve

    Tags: Michael Thompson, Doing Business in Africa