Supply Chain Blog

10 Times You Need Supply Chain Interim Management

Posted by Michael Thompson on Fri, Nov 25, 2011
Supply Chain Interim ManagementI have been talking to a number of supply chain executives during the last few weeks and something of a theme has emerged.
The theme is the need for highly skilled supply chain resource, available at short notice, with the flexibility to switch off the resource at will ….and at fee rates comparable to exiting resource. “So nothing unreasonable there”, I thought.
What we actually discussed was supply chain interim management and how the placing of a specific skilled resource can have a dramatic impact on an organisation. We went on to discuss the typical roles that supply chain executives are currently demanding.  
With this and our recent experience with clients, I offer the follow 10 supply chain interim management roles:
  1. Resource gap Bridging a gap prior to a full time appointment being made.  This was mentioned by everyone – “we need a planning manager …. urgently”
  2. Backfill. To temporarily backfill a position because the incumbent manager is about to be seconded to a project. “We have a large project that has started (SAP projects were mentioned a number of times) & we need an interim Head of Supply Chain”.
  3. Project Managing a specific project that would normally be carried out by company personnel but resource is a constraint.  This is a common need and mentioned frequently.
  4. Temporary or part-time operational assignments the need for which will end, do not justify a full time employee or are designed to coach and train a new manager. 
  5. Holding the fort in a situation where company strategy is not decided and operational roles are unclear.
  6. Crisis Managing a crisis when a unexpected event occurs, e.g. dismissal, death or unexpected departure.
  7. Post-acquisition or merger management prior to establishment of the full management team.
  8. Pre-sale management of a company or business unit in preparation for a sale.
  9. Urgent change management of strategy, cost structure, organisation, process etc., when an external threat is recognised. e.g. sudden loss of market share, unsustainable debt position, hostile take-over bid, etc.
  10. Turnaround management or ‘company doctor’ when a permanent position is inappropriate or the role may be perceived as too risky to attract a permanent candidate.
My discussions were with a relatively small number of people.  I would welcome any further comments.

 

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

Supply chain services; Big Firm vs Small Niche experts?

Posted by Michael Thompson on Mon, Mar 14, 2011

In the 1970s when organisations bought PCs it used to be said that "you never got fired for buying IBM".

Selecting supply chaon consultancyI wonder if the same attitude to risk is still true in 2011 when organisations buy supply chain consultancy services?

Here are two recent examples of projects for which Enchange has bid:

A multinational pharmaceutical client wanted to improve its demand planning and S&OP processes.  It was a competitive bid between Enchange and one of the ‘Big Consultancy Firms’.  Enchange was chosen because we were able to demonstrate a successful track record on similar projects and we were “far better value for money”.

Another multinational company wanted to implement a new regional supply chain organisation.  Enchange were invited to bid with two other ‘Big Consultancy Firms’, one of whom won the bid.  We were told that the decision was based upon a degree of “comfort” that the winning firm was able to offer, despite the fact that Enchange had the technical competency and were more competitively priced.  Unofficially the winning bid was perceived as being a “lower risk option”.

Of course we are very pleased to have been chosen to work on the first project.  However, we are convinced that in the second example the higher risk option has been chosen by the client.

Talking to fellow supply chain consultancy professionals, the view is that it can be difficult for smaller specialist firms to compete with the “Big Names”. 

Furthermore, there is a common consent with fellow professionals that far from being a low risk option, hiring one of the ‘Big Names’ can add considerably to project risk, especially if the firm beings to dominate the client project.

So in answer to my own question? 

Yes.  Decisions on hiring supply chain (or other consultancy services) is still part driven by a perception of relatively low risk in hiring a ‘Big Name’.

This is a theme that I will return to in the coming weeks. 

In the meantime, I welcome any comments.

 

Image credit: HikingArtist.com

Tags: Interim Management, CEO, Performance Improvement, Michael Thompson

Exactly What Does An FMCG RTM Distribution Assessment Deliver?

Posted by Dave Jordan on Tue, Dec 21, 2010

In the past week I have met two Sales Directors from blue-chip FMCG companies to discuss an assessment review of their RTM network. Surprisingly, neither Director was interested and gave a remarkably aligned reason for this rejection. “All this does is raise Sales In and we know how to do that already”.

No, Nein, La, Nu, He, Nem, Không có!!! Whatever language you choose, this understanding of RTM evaluation is incorrect. There is no doubt Sales Directors across the globe know how to increase Sales In. There is a plethora of techniques to get the Distribution network to take more stock, e.g. promotions, discounts, extended credit etc, etc. Unless you are regularly working with “out of stocks” at the Distributor pushing Sales In does not guarantee one single extra sale, not one.

Without a focus on Sales Out any stock pushed into an RTM network is likely just to sit in warehouses as there is no obvious consumer demand for it. The Distributor is sitting on plenty of valuable stock but without a pull from the trade all this extra pushed stock is wasted. One of the key drivers for a push strategy is the alignment of Sales In targets with Sales Team bonus payments. Once the stock has moved out of Producer hands it is considered a “sale” and this is simply not true. Nothing is sold until a consumer has handed over their hard cash at the till.

distribution assessment toolThe beauty of an RTM Assessment is that it addresses how to achieve a sales uplift and every assessment I have been involved with has achieved such an uplift! If you get close to your Distributors and develop a lasting relationship you will be able to get more out of the market – even in a recession.

Partnership – treat them as equals as they are an integral part of your business. Hold regular meetings and ensure the discussion is a real two-way process.

Planning & Logistics – do not assume they know how to aggregate demand by sku. If their forecast is more accurate then this ripples right back to you own factories and procurement activities.

Sales/Order Management – provide training to ensure your face to the customer is professional and competent. Ensure orders are captured promptly AND that stock is available.

Finance & Back Office – is the Distributor financially sound and capital efficient? Do they recruit and retain the right calibre of people and are they rewarded sensibly?

This is just a snapshot of a comprehensive RTM assessment review and more can be found here.

If you have struggled to make your 2010 numbers you might find that Q1 2011 presents an extremely difficult start to the year. A thorough review of your RTM Distribution network could be just what you need to make up ground in the following months.

Uplift in real sales is there for the taking!

Tags: Route to Market, Interim Management, Dave Jordan, Distribution, RTM Assessment Tool, Inventory Management & Stock Control

7 Reasons for Securing an Interim Supply Chain Manager in CEE

Posted by Dave Jordan on Tue, Dec 14, 2010

 

The recession rumbles on and on and on. Greece, then Ireland; who is next in line for a heavy duty IMF/EU bale out? Should Spain become the next country to hit the financial wall that would send a few shock waves around Europe.

Interim Manager SoftedgeSo why is Interim Management an opportunity particularly in CEE at present? Mainly as a result of the economic conditions numerous companies have folded this year and a similar number have been taken over or merged with others. There is more of each to come, I fear. Obviously companies that go bust are too late to be helped although I am not sure too many actually sought professional help and guidance.

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

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

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

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

Interim Management User's Guide

 

Image credit : CELALTEBER

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

The Top 10 Smash Hits of Warehousing & Logistics

Posted by Dave Jordan on Tue, Nov 09, 2010

The Top 10 Smash Hits of Warehousing Hello pop pickers, this weeks’ top 10 smash hits in this important but often forgotten part of the Supply Chain.

At number 10 is All Systems Go by Donna Summer – Do not cut costs on your WMS and avoid any untried local “specials”. Make sure all stakeholders are involved in the design specification at an early stage to avoid costly bolt-ons later.

Staying at number 9 is Prodigy with Out Of Space - Ensure your chosen 3PLP has sufficient space or can expand to meet your growth expectation. If your 3PLP offers you a site which cannot expand then walk away!

Old favourites Smokie with For A Few Dollars More lie at 8th – Avoid the temptation to accept your lowest 3PLP quote. Cost is not everything and if you bit on the low quote you will probably pay for it in the long run. Evaluate 3PLP offers thoroughly including which staff they intend to deploy on your business. Also, is it really cheaper and more efficient to outsource?

Up And Away from the Banned of St Trinians pops up at number 7 this week – your fast moving, profit generating brands should be on the floor or bottom racks to facilitate picking. Those slow moving or seasonal items (in that case why do you have ANY stock?) should be on the top row and out of the way.

Alliyah bringing us Age Ain’t Nothing But A Number stays at number 6 – your WMS must be capable of carrying out stock ageing analysis to prevent losses from expired products. If age analysis is not carried out you will lose sales when you realise your “stock” is not actually suitable for sale.

Holding steady at number 5 is Counting Every Minute from Sonia – if you want to avoid a severe financial shock at the end of the financial year then you must take responsibility for ensuring stock is accurately counted. In addition to statutory fiscal counting you should activate routine cycle counting to ensure your data retains its accuracy. Secondly, if you see a stock mismatch early enough you may be able to rectify it before memories fade and time moves on.

Keep On Truckin’ by Eddie Kendricks sits at 4 this week – whether you chose narrow aisle or standard FLT’s do a simple check and ensure battery type are interchangeable across the fleet AND sufficient extra batteries are available to ensure 24/7 coverage. Surprisingly this is not an uncommon occurrence!

Sittin’ On The Dock Of The Bay by Otis Redding begins the top 3 countdown – how many loading bays does your 3PLP have or propose for a new build? You have to get stock in at the same time as you move stock out. The almost inevitable month end bonus push from Sales will expose a simple lack of doors and bays.

Living In A Box by the delightfully titled Living in a Box is at number 2 – forgive my indulgence. I think this is a great Supply Chain themed song so it gets in!

It Takes Two Baby by ageing rockers Rod Stewart and Tina Turner leads the warehousing chart this week – do not assume your 3PLP knows enough about your business to leave him alone on a day to day basis. You need daily discussions to resolve issues plus monthly performance reviews at an appropriate senior level. Get yourself an office in the 3PLP premises and work hard at the relationship on a daily basis.

What next? Wait and see a slightly different version of the charts next time.

Contact Enchange

Tags: FMCG, Interim Management, Dave Jordan, Pharma, Logistics Management, Inventory Management & Stock Control