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 Planning: If you like chocolate, now is the time!

Posted by Dave Jordan on Wed, Jan 11, 2017

Overeaten chocolate during the holidays but still want some more? Get yourself and a large blue IKEA bag down to your local supermarket as chocolate is heavily discounted. Easter is not far away this year so why not save a little cash and stock up now - use by dates permitting, of course!

Post Christmas I have been taking a look at International Key Account retailers and seeing how they are coping in the continuing economic squeeze. One question came to mind after seeing well over 20 outlets of various retailers. What do they all do with all that chocolate and other Christmasy confectionery?

Planning Chocolate Sale The same scenario is also present after Easter. Shelf after shelf and gondola after gondola of seasonal chocolate in all sorts of formats, shapes and sizes. Not simple packaging either and it must cost a fortune to pack a 15cm tall chocolate Santa or rabbit into a multi-coloured coffret. To be fair it is not just one manufacturer who has suffered a forecasting blip, every major name chocolate producer appears unable to get it right. For all of them Christmas must be a peak period and one that can make or break the year-end results and with no time left to remedy any sales deficit. Similarly, the timing can also place an un-provisioned hole in Q1 numbers even before you have taken down the decorations.

Of course, nobody wants to disappoint consumers and run out of stock at those peak periods but how can they afford the apparent over-stocking? If the goods are on consignment or “sale or return" then I can perhaps understand why retailers let displays hang around for several weeks. Even then I doubt the retailers would relish wasting valuable sales space on Easter themed chocolate into June and beyond.

Considering the power retailers have over producers I do not understand why stock is allowed to gather dust on shelves. Certainly, for many foodstuffs the listing contracts will contain clauses to withdraw stocks but usually only when the sell-by date approaches or off-take is ridiculously low.

What is the destiny of chocolate Santas and bunny rabbits after the sell-by date arrives? You cannot do much with it, can you? You cannot send it to a sink market in another country and with the vast majority of edibles you cannot recycle the stuff into fresh production as you could with washing powder, for example. If you have to write-off stock you have to pay to have it destroyed professionally and you frequently have to pay VAT on the stock value as if it was a sale.

Whatever the destiny of all that yummy chocolatey goodness, it is indicative of a lack of rigour in forecasting and/or sales expectations. Diverting some investment from stock that does not sell into taking a long, hard look at your Sales & Operational Planning (S&OP) process could offer a very rapid pay-back for those companies willing to break the chocolate losses mould.

As a step further, Supply Chain Analytics can help you to fully understand what is really happening in your peak periods and why you continue to miss your sales targets. Presently, there is a free of charge offer to analyse some of your data and expose the reality of your decision making.

Image courtesy of Nora Ashbee at Enchange.com 

 

 

Tags: FMCG, Christmas, Dave Jordan, Supply Chain, S&OP, Forecasting & Demand Planning, Supply Chain Analytics

The Twelve Days of Supply Chain 2016

Posted by Dave Jordan on Mon, Dec 19, 2016

On the first day of Christmas, 12 days of SC Xmas  Small2 copy resized 600
Enchange gave to me 
A robust S&OP. 

On the second day of Christmas, 
Enchange gave to me 
Two fine consultants, 
And a robust S&OP.

On the third day of Christmas, 
Enchange gave to me 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the fourth day of Christmas, 
Enchange gave to me 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the fifth day of Christmas, 
Enchange gave to me 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the sixth day of Christmas, 
Enchange gave to me 
A suite of KPI’s 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the seventh day of Christmas, 
Enchange gave to me 
SupplyVue Analytics
A suite of KPI’s,
Better bottom line, 
Streamlined logistics, 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the eighth day of Christmas, 
Enchange gave to me 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the ninth day of Christmas, 
Enchange gave to me 
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics,
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the tenth day of Christmas, 
Enchange gave to me 
Great Customer Service,
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s 
Better bottom line, 
Streamlined logistics 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the eleventh day of Christmas, 
Enchange gave to me 
Integrated Supply Chain, 
Great Customer Service, 
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

On the twelfth day of Christmas,                                                                          Enchange gave to me
APO Implementation
Integrated Supply Chain, 
Great Customer Service, 
Return on investment 
The RTM Tool, 
SupplyVue Analytics
A suite of KPI’s, 
Better bottom line, 
Streamlined logistics 
An ERP go-live,
Two fine consultants, 
And a robust S&OP.

Have you got your breath back? Finally, we wish you a very Merry Christmas and an increasinly prosperous New Year!

Image courtesy of Nora Ashbee at Enchange.com

Other seasonal posts:

Tags: Christmas, Dave Jordan, CEO, Humour, Performance Improvement, Supply Chain, S&OP, Forecasting & Demand Planning

FMCG CEO Christmas Gift: Implement S&OP – Slade style!

Posted by Dave Jordan on Fri, Dec 16, 2016

Christmas is coming around faster than ever and who better than Noddy Holder and Slade to give a Sales & Operational Planning (S&OP) process to your business as a present. This song has been heard at Christmas every year since 1973! If you have been living in a cave on a remote island and don't know the tune you can click here for the original, boring non-S&OP version.

1 2 3 4.......

Are you looking at your sales chart on the wall? Sales and Operational Planning
Is it the time you have to stop the fall?
You’ve tried overpaying salesmen,
You’ve loaded up the trade
Do you need to find a better way?

Chorus:
So here it is S&OP
Everybody should run one
Look to the future; how?
Six months or even one.

Are you guessing how much you’re going to sell?
Are you suffering high out of stock as well?
Does supply chain always tell you, pre-SOP is best?
So why not work together for a test?

Chorus:
So here it is S&OP
Everybody should run one
Look to the future; how?
Six months or even one.

What will the salesmen do
When they see their targets being met?
Ah ah
They’ll be changing the chart gradient on the wall.
Not for them will sales fall and fall.
When you implement S&OP you make quite a change
Looking back the old way will feel so strange.

Chorus:
So here it is S&OP
Everybody should run one
Look to the future ;  how?
Six months or even one.

Noddy knows best so why not find out about S&OP now and give your business the perfect Christmas gift.

Image courtesy of Nora Ashbee at Enchange.com

 

Tags: FMCG, Christmas, Dave Jordan, CEO, Humour, S&OP, Forecasting & Demand Planning

Santa & Opening Presents - S&OP Putting Elves in their place

Posted by Dave Jordan on Wed, Dec 14, 2016

Dear Mr. K Ite,

Thank you for your very short note highlighting some minor points; I can see you are a little aggrieved. On behalf of "Mr Claus I will attempt to minimise your apparent unease with the S&OP process in the context of the very small print in your members employment conditions.

I think we have to manage expectations here. I know your members play an important role in the Christmas S&OP but as far as I am aware there are very few (if any) Christmas songs about Elves. Let me see now:

Dashing through the snow in a one elf open sleigh….I think not!

Good King Elf looked out of the feast of Stephen…..no, not there either.

Rudolf the red nosed elf….not quite eh?

You do not even get a mention in the all encompassing 12 Days of Christmas!!!

Your members are lucky to have assured contracts which guarantee employment every year without fail. Unless the world runs out of children I think we can safely see continued employment into the future. The green hats were part of the 2009 collective bargaining agreement where we agreed to new hats every 5 years instead of the industry standard of every 10 years. You will recall we reversed out decision to change colour of the hats to pink at the same time.

Santa and S&OP Planning Cylcle

The employment market is currently very tough and I urge you to communicate to your members the difficulties you will cause should you withdraw your labour. We are unable to pay you for doing nothing for 46 weeks of the year and I am sure you would agree with this. Frankly, if this is what you and you members expect then I suggest you apply to join the Marketing Department.

Finally, I address your comment on S&OP specifically. In our industry planning is everything to ensure we keep the children happy AND do not enter January with excess stock nobody wants. If you want to see what can happen when you get the planning wrong in our kind of business please check out Vuvuzelas and the Value of S&OP.

I am sure you will communicate our position to your members.

With chilly regards,

Mr. I Cicle

 

Tags: Christmas, Dave Jordan, Supply Chain, S&OP, Forecasting & Demand Planning

Santa & Opening Presents, S&OP & the Elves Respond

Posted by Michael Thompson on Mon, Dec 12, 2016

Dear Mr Santa,

I refer to the recent blog article, "Santa & Opening Presents; Why S&OP is Invaluable at Christmas".

As I mentioned in the consultation process just prior to S&OP implementation, I was prepared on behalf of our members to support the programme, provided and only provided it did not affect our rights as elves.

IncideAngryElfntally, I see that I am not alone in considering that S&OP is not really needed & refer you to Mike Thompson’s excellent series of blogs starting with “What has S&OP ever done for us”.

We were prepared to concede certain rights under the Working Time Directive but now things have gone too far. In particular I would like to draw your attention to our most serious grievances – there are more:
  1. Elves unemployed.  We cannot and will not accept that lack of work is a reason for redundancy.
  2. Season Bonus.  Pah.  When has a new green hat ever been proper recompense for 16 hour working days and such appalling shift patterns?  And let’s not forget that we only received the hats because of overstocking due to a poor sales forecast (see other S&OP blog).

Unless our legitimate grievances are dealt with immediately, you will leave us with no choice other than to consider industrial action.

In the meantime, and to demonstrate just how seriously we consider the current situation to be, we are no longer prepared to sing the Company Song.  “Yo Ho Ho” is old hat (excuse the pun). 

I look forward to your reply.

Yours sincerely,

Fred K. Ite

Shop Steward & Chief Elf

 

Tags: Christmas, Michael Thompson, S&OP, Forecasting & Demand Planning

Supply Chain Analytics: The birth of a new Dawn, or Daniel

Posted by Dave Jordan on Wed, Nov 02, 2016

Anyone expecting their first child has probably been told by a gloating-doting grandparent-to be that their lives are about to change dramatically. This is of course untrue as in reality dramatically is too simple a word and in any event, that “change” is far, far different than granny suggests. Your pre-natal life as you know it will become obsolete at the snip of a chord.

Sleep, sanity, social life and other activities beginning with “s” will soon become history as you become slaves to the mini-me you have created who appears to have over active exhaust systems at both ends. Night and day whizz past in a blur of endless demands for food and cleaning and screaming and that is just the husband.

Did you know what sex the little darling was before the big day or did you wait and see what would be delivered? Did you and the family try to predict boy or girl based on family history? You know, things like the first born is always a boy if the birth takes place in summer. Or, it must be a girl based on the size of the baby bump etc., etc.

Supply_Chain_Analytics_CEO_Planning.jpgDespite all the indicators and family history and old wives’ tales you got the sex of the baby wrong? Dear me, there are only 2 options after all! If you can get that 50/50 prediction wrong how on earth do people cope in the supply chain business when the number and type of variables is enormous? (You knew the segue was coming and there it is!)

What is going to happen in the future is always difficult to predict even remotely accurately.

Hold on a minute but what about all that Supply Chain data? Your Management Information System is running red hot; the KPI Dashboard has digital steam coming out of its ears and you can see numbers bursting out of the air vents on the top of the Data Warehouse. You have more data available than you can shake a USB Data Stick at!

The problem is that all those numbers and colour coded percentages help to tell you everything that has already happened in your Supply Chain. Good to know of course but isn’t it better to know why certain events happened and how they can be avoided in the future?

I can imagine your last S&OP meeting involved making considered changes to plans and activities to correct certain deficiencies or to take advantage of opportunities. All well and good but the internal operational deficiency you have is that you must wait weeks or months or longer to find out if your strategy was successful.

What you need is an analytical tool to take advantage of all that data and convert it into actionable information. A tool which allows you to diagnose the precise causes of past events and which allows you to model the probable results of your decisions into the future. These tools exist as cost effective cloud based solutions but most companies stubbornly remain convinced that their expensively installed MIS/ERP should be sufficient. Put simply, alone, they are not.

When you were thinking about starting a family if you knew which “tadpole” was most likely to win the race you would not be on a ladder hurriedly repainting the nursery blue!

Image courtesy of dream designs at freedigitalphotos.net

Tags: CEO, Forecasting & Demand Planning, Supply Chain Analytics, IT

Supply Chain – regular IT to Supply Chain Analytics

Posted by Dave Jordan on Thu, Aug 11, 2016

I am an App-free zone. I have to admit I am not a big App fan but at least I now know what an App is after a lengthy period of ignorant denial. Originally used only by cutting edge, bearded techies (sorry Steve), Apps have become a major part of routine as life seems to revolve around getting more out of mobile phones.

Some of these telephones are more powerful than desktop PC’s and the cameras are certainly as good as mid-range stand-alone versions. In fact, why is a mobile phone called a telephone anymore? The functionality is such a long way from the house brick sized “hand” sets you see on old shows like The Sweeney that another moniker seems appropriate.

Supply_Chain_Analytics_FMCG_PLANNING_PHARMA_IT.jpgWe do not call a modern car a wheel simply because that’s what started things rolling in that technology, do we? Nor do we call our curved, slimline HDTVs cathode ray tubes. Find a new name people!

Apps in industry and supply chain in particular tend to be rather larger in size and far more expensive but do they all do what it says on the tin? Largely, yes.

  • ERPs do bring a high degree of rigour, data collation and transactional integrity to complicated manufacturing and distributive supply chains.
  • WMS systems do provide you with inventory control, performance measurement and stock surety as a basis for excellent customer service.
  • DRP helps you plan the efficient distribution of your finished product.
  • TRP works to ensure your stock is on the move to clients in good time and with efficient fuel and time consumption.
  • APO can certainly help a company improve planning across the extended supply chain.

These and more apps or IT packages are certainly good news for people running complicated regional or global supply chains. While they all have a value and a role to play there is something they do not provide. 

Despite spending millions of Euros in sophisticated and not so sophisticated systems, are there any significant new opportunities to improve supply chain performance? Yes, and here is why:

  • All those increasingly complex IT-led projects have automated ways of working whether they are optimum or not. Generally, this provides incremental improvement at best and with significantly increased variability and caution in the planning processes.
  • The sales forecast is often blamed as the cause of whatever problem is current. In reality the issue lies within the supply chain processes, the set-up of the IT and/or how the various tools are being used in parallel and in tandem.
  • Managing this never ending supply chain complexity becomes the real challenge. Faced with this complexity and increasing uncertainty, planners buffer their supply chains with inventory and lead-times. Inventory becomes that large eared elephant in the room. Everyone knows it reduces free cash and adds unnecessary cost but nobody knows exactly what to do about it and even fewer are brave enough to propose anything.

There really is nothing positive about unnecessary inventory in the supply chain.

The answer? What is needed is better and more accessible data analysis to drive decision making across the supply chain and not in one stand-alone sub function. Decisions need to be taken based on facts and without the emotion or gut feel that is often the default motivation for immediate action.  This is where the App and half that is Supply Chain Analytics can contribute to your business success.

SC Analytics Apps or IT can sit above your existing transactional IT to overcome these challenges and help you ensure all the individual sub-functions are working seamlessly and synergistically. You do not write off your existing systems or put them in a box on a shelf; they all have a major part to play but they would benefit from supply chain analytics help.

Thinking about it, the term “supply chain” actually does reflect the reality for companies yet to operate with some sort of Supply Chain Analytics. Think of a heavy stainless steel chain draped across the desk. Yes, all the functions are indeed joined together but some links are not fully aligned, some lie at odd angles and overlap with others while others are stretched out and only just connect at the extremes. Doesn’t that sound like something that can be further improved?

Maybe the supply chain should actually be the “supply artery” without all the spatial confusion of a chain. The artery would continually supply the precise amount of product required at any time to any location as demand dictates and taking all environmental factors into account. Now, that is an App I would buy!

Image courtesy of Stuart Miles at freedigitalphotos.net

Tags: Performance Improvement, ERP/SAP, Forecasting & Demand Planning, Supply Chain Analytics

Postman Pat, Postman Pat, Postman Pat & his Supply Chain hat

Posted by Dave Jordan on Wed, Jul 06, 2016

I recently peeped outside of the FMCG and Pharmaceutical world and took a look at the amount of empty beds in the National Health Service in UK and how a little alternative thinking plus basic demand and supply planning expertise could improve bed utilisation. Today it is the turn of the Royal Mail and all those “black and white cat” postie types to be in line for my critique. 

Before you say that the Royal Mail is not a proper supply chain, it is a supply chain and a very complicated one at that. Apart from the reducing but still significant Christmas card peak, this is a business that cannot really forecast how many letters and parcels will be dropped into Post Offices and Post Boxes for delivery on a daily basis. Or perhaps they can or should? Is it any different from the daunting, daily, dynamic demand volatility experienced in Tesco, Asda and Aldi etc.?

Anyway, that is not the issue on this occasion but it is about the Royal Mail redirection service which should be a very straightforward formality. You move to a new address and pay the Royal Mail to keep an eye on your letters and parcels and forward them to your new abode. This is not as simple as it sounds as finding that gas bill in a plain brown envelope must be very close to searching for a needle in a haystack. Nevertheless, they have been doing this for ages and in large numbers so should be very proficient.

FMCG_MAIL_POSTAL_SUPPLY_CHAIN_SERVICE.jpgNot this time. They got it horribly wrong from day one and continued to do so as even “signed for” mail which must be capable of automatic sorting was sent to the old address. Luckily we are still in the locality and in contact with the remaining Neanderthal student residents who in their few conscious periods send vowel-free texts letting us know Postman Pat has left something in the heiress’s name. Before they have the chance to eat or smoke what has arrived we quickly pop down and rescue items that slipped through the redirect net. That net must have holes the size of Ronaldo’s ego.

After repeated telephone calls and emails and the release of only a minor amount of my pent up frustration from afar, Postman Pat has refunded all costs and is now carrying out the service – very efficiently now, incidentally – free of charge. What a waste of time, energy and other resources!

I have no idea what the inside of a sorting office looks like or what processes and procedures are in place or their daily challenges but failure to carry out core advertised service is very disappointing. Delivering enveloped and packaged mail is what they do best; if they cannot get that right then what chance do they have with other value added services?

Walk into a pub on a scorching day (ok, so that is not going to be in UK) to be told sorry, no beer. Step into a supermarket to find no bread, milk, tea or cheese! Pull up at the McDonalds drive-in to be told no fries today - actually no bad thing!

You have to get the basics right or your credibility with existing and potential new clients is severely limited. Some organisations bend over backwards to gain new business and rightly so but why don’t they bend further backwards to keep that business? In FMCG and Pharma I find business retention is far harder than finding it in the first place.

Image courtesy of Ohmega1982 at freedigitalphotos.net

 

 

Tags: Customer service, FMCG, Performance Improvement, Pharma, Forecasting & Demand Planning

UK NHS Supply Chain: bed-busting benefits of patient SKUs

Posted by Dave Jordan on Wed, Jun 29, 2016

Some time ago I looked at the often dreadful customer service offered by FMCG and Telecoms companies in CEE. Of course, this avoidable malaise is not restricted to that part of the world. After being in UK for a few weeks I have experienced really poor service from organisations you would think had top notch, high performing supply chains.

The Royal Mail and all those “black and white cat” types will be the subject of a later blog but first in line for critique is the National Health Service.

The NHS in the UK is a precious gem and really is the envy of most other countries where credit cards have to be produced before you hear the Marigold’s snap on. The NHS is supported by a seriously complex, unpredictable and volatile supply chain. On this occasion supply chain certainly includes the provision of medical supplies, equipment, foods to multiple locations around a hospital site. (I am tempted to bang on about the quality food or to be more exact, the amount of wasted food as most of what I see is not going to win any awards.)

My bone of contention with NHS service is about beds, the availability of which is a constant battle which is seemingly never won. Operations are regularly postponed when there are no beds available for post-op recuperation. Yes, some beds are certainly blocked by long term patient residents but my observations suggest there are actually many beds woefully under utilised. To alleviate the problem, I am certainly not suggesting bed sharing which does occur elsewhere. (I have personally seen a single bed with 4 occupants at the same time in a certain country.)

While it is important patients are treated with the utmost dignity and with the best care in the world I think NHS bed availability would be improved if patients were considered as SKU’s on a supermarket shelf. Just take the emotion away for a moment and consider how this might work.

Each bed is shelf in a shop and the optimum situation is to see all these shelf locations full and more importantly, replenished as soon as stock (patients) moves off the shelves (beds). As with transferring stock from the Lidl back of store to gondola ends, this should not be rocket science. And quite right too as long as decisions are made in the optimum sequence and information is in full flow.

Admittedly based on my massive sample of 1 hospital, I see the following sequence of activities:

  1. NHS_SUPPLY_CHAIN_BED_PLANNING.jpg1. Patient gets ready to leave and sits in a chair waiting for discharge.
  2. 2. Nothing happens at the bed.
  3. 3. A patient leaves the bed and is discharged.
  4. 4. Nothing happens at the bed.
  5. 5. The bed is stripped and all cups, jugs etc. are removed.
  6. 6. Nothing happens at the bed.
  7. 7. Bed and surrounding area are cleaned and the bed re-made.
  8. 8. Nothing happens at the bed.
  9. 9. Eventually, a new patient arrives to fill the bed but this can be several hours and often overnight, after the vacancy was first identified.

Just a little bit of basic demand and supply forecasting plus timely information transfer would see a far higher utilisation of available bed space and over the period of a year, noticeably shorter waiting times.

Ok, so I know little about the intricacies of the NHS and maybe other hospitals are slicker in their bed allocation but I feel it is a huge opportunity. A change in mindset and a willingness to learn from other supply chains could prove invaluable. I did offer my services to look at this acute bed shortage problem and was welcomed as long as I had previous experience of working within the NHS…….

Isn’t that the problem? If you are not open to new ideas and innovative solutions, you will get nowhere while the NHS wastes money on incestuous internal studies and reviews. Remember Einstein, who probably did have good knowledge of rocket science; “Insanity: doing the same thing over and over again and expecting different results.”

Image courtesy of Suriya Kankliang at freedigitalphotos.net

 

Tags: SKU, FMCG, Dave Jordan, Forecasting & Demand Planning, IT, Information