Supply Chain Blog

FMCG Supply Chain - how green and environmentally friendly is yours?

Posted by Dave Jordan on Wed, Apr 25, 2012

I have always thought it a little strange. The “green “ movement is all about saving the Earth  yet the same colour is used for “green” house gases  (GHG) that are far from green and moving us towards unavoidable planetary oblivion, apparently. Now, there is huge debate about what contributes more to the ozone layer depletion; is it excessive human use of fossil fuels or is it primarily the fact that cows eat enormous quantities of grass leading to “cow house gas” emissions in rather large volumes?

However, that is not the point of this blog. I simply want to take a look at how many FMCG, Brewing and Pharmaceutical companies waste money which if they avoided would have a welcome knock-on effect of reducing their overall emission footprint.

Carbon footprint complex Netsize resized 600

  1. Why are office lights kept on all night? There is nobody in the office yet it is lit up like a Christmas tree with potentially hundreds of lights creating heat and gobbling up electricity for absolutely nil benefit. A simple timer system would secure a decent reduction in the fuel invoice. “But it is included in the rental cost” – it probably is and you are paying for this whether you like it or not. Perhaps this source of waste sounds insignificant when compared to a heavy duty factory but it all helps.
  2. Rain water harvesting really should be mandatory for factories. They usually have expansive roofs which are ideal for channeling and collecting water. Instead of using fresh water that has been chemically treated and pumped from miles away to flush toilets why not use “free” rain water. Ok, if you are located in Riyadh then the opportunity for rain collection is a rarity but if you are based in Manchester UK just think how much you can save and contribute to a cleaner environment.
  3. Solar water heating and electricity generation are becoming increasingly affordable and should be considered for any new factory project. Solar heating of water is probably more advanced yet panel costs are lowering each year. Yes there is an investment but if you are a major user of gas or electricity for water heating and you get a reasonable amount of sun (i.e. not Manchester) then a decent return on investment is achievable.
  4. Do you know how much your business is wasting in write offs and stock you do not need? If you don’t, you should. If we assume a moderately sized business of 500m Euro turnover then depending on the sector you could be running at a waste level of up to 8% of turnover, e.g. short shelf-life yoghurt etc. A detergents business will operate at considerably lower levels of waste but if we assume a modest 1% overall waste then that is 5m Euro down the drain. This is probably the worst kind of waste as you have paid for the product to be manufactured transported etc and then nobody buys it and you have to pay to have it destroyed.
  5. My bug bear is unnecessary packaging. Companies say they have reduced by x% and used more recycled materials but there is still a fair way to go. Innovation decisions need to be business wide and not just marketing wish lists. If you do not keep marketing in check they will add colours, layers, weight, thickness etc all to make their product better than competition. I admit that at the sharp end of the Route To Market shopper decisions can be swayed by packaging quality and appearance but still there is so much that is not required and goes directly into the waste bin (or hopefully the recycling system).

You will appreciate that items 1-5 are not exclusively about Supply Chain but that department inevitably receives the most focus. However, taking a look across the total business will expose numerous areas of waste and unnecessary material consumption.

While many may well blame the loss of the ozone layer on a their local herd of Black Angus cattle, companies can do so much more and it is not rocket science any more.

Tags: FMCG, Route to Market, Dave Jordan, Performance Improvement, Manufacturing Footprint, Supply Chain, S&OP, Low Carbon

FMCG Logistics, Transport, Trucks and Yorkie Bars

Posted by Dave Jordan on Mon, Apr 16, 2012

I like trucking, I like trucking, I like trucking and I like to truck.” Those of you who have not been on the planet very long and people who like hedgehogs will not be familiar with this Not The 9 O’clock News ditty from the UK in 1979-82. The sketch showed macho truck drivers ploughing across the country flattening hedgehogs and munching on the obligatory chocolate Yorkie. (I was thinking how much smaller the Yorkie is now and when I checked it is indeed 15g and 2 chunks lighter than when I had my own teeth!)

Some of the trucks we see on the roads today are extremely high tech, modern and comfortable. They incorporate the latest motoring technology as well as a degree of driver cab  luxury of which 1970’s Yorkie Man could only dream. Tachographs have been around for ages but they are now largely superceded by satellite navigation that can track transport and shipments in real time ensuring drivers obey the rules of the road and avoid taking possibly amorous diversions they would rather keep quiet!

Load security and integrity can be monitored by a whole host of sensors keeping close watch on temperature, humidity, security seals and how often the doors have been opened and where and when. You also see some crazy looking trucks where the tops have been streamlined to cut down wind resistance and contributing to a green Supply Chain. Everything sounds hunky dory then as these modern juggernauts criss-cross the motorway network delivering chemicals, spares or finished goods for FMCG and other sectors. Well, if you look towards the east of Europe you will find that Yorkie Man and his crumbling kit are alive and well.

Trucking in CEE Netsize resized 600Yes, there are large fleets of top class modern equipment in CEE serving the internal country needs and of import and export to the EU. However, there remain a large number of smaller operators and owner-drivers who have not invested and upgraded to suit the needs of the modern transport trade. Again, there are some good examples but far too many are still using gas guzzling, fume spewing, unsafe vehicles that may be transporting your goods. Remember, when a truck delivers your product they form part of your face to the customer.

Too many vehicles – well, 1 is too many isn’t it? – are operating on less than perfect road infrastructures with bald tyres, broken lights, poor load security and on borrowed time. Couple these failings with indifferent driving skills and you have a recipe for a trucking disaster.

In particular, producer companies in those countries waiting to join the EU should take a look at how they move goods around and start thinking about forcing an upgrade before the Yorkie gets even smaller.

Tags: Logistics Service Provider, Dave Jordan, Humour, Pharma, Supply Chain, CEE, Logistics Management, Low Carbon