Supply Chain Blog

FMCG: 7 Reasons to engage an Interim Supply Chain Manager

Posted by Dave Jordan on Wed, Mar 11, 2015

The global recession rumbles on and on and on like Coronation Street – which will end first? Once again it is Greece holding out a cap for another IMF/EU bale out? Spain and others remain on the brink and France/Germany seem to be keeping their own Euro boats afloat by sinking Euro partners. Is that what baling out really means?

Which leads me to write on why Interim Management is a particular opportunity 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 and 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 anyway.

Those operating companies and Private Equity (PE) 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 thriving shrubs, shareholders and PE owners will expect their pound (or Euro?) of flesh.

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

  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 head-hunter followed by a training period.

  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”.
    FMCG interim management performance improvement
  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 really 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 usually 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 when the flowers finally bloom.

Interim Management Image courtesy of Enchange.com

Green shoots image courtesy graur codrin at freedigitalphotos.net

Tags: FMCG, Interim Management, CEO, Performance Improvement, Private Equity, Supply Chain

FMCG/Pharma Mergers & Acquisitions and Supply Chains

Posted by Dave Jordan on Tue, Oct 19, 2010
As we slowly (but surely?) emerge out of recession you can expect the number of M&A deals to rise. Many companies have tightened their belts and tried to ride out the economic storm but many have already gone to the wall and even more will follow. The recession is hitting local companies particularly badly in Romania where several big local players have declared insolvency.

If the Private equity people have their wallets open then they may benefit from some rich pickings.

While some M&A deals seem like they are made in heaven others are a disaster waiting to happen and often it is because the people signing the deal have not paid sufficient attention to the integration of potentially very different supply chains. Post merger supply chain integrationFailure to do this can turn successful companies into a chaos from which it is difficult to self-extricate. You cannot operate 2 discrete Supply Chains for long after a merger; you should plan Supply Chain integration even before the ink dries.

Unless you are overflowing with surplus resources do yourself a favour and get somebody else to plan and execute the integration. Your existing people will still be doing their day jobs (and worrying about job security!) and will not have time to step back, look at the big picture and move the right levers at the right time.

A few key focus areas:

IT - is each entity running SAP or another common system? Evaluate both, chose the optimum system and migrate to it. You can spend hours arguing about which system to migrate to so providing they are top class IT solutions simply evaluate both, choose one quickly and move on.

S&OP - In some cases it can be advantageous for neither of the merger parties to operate a robust S&OP. Implementing such a process jointly can provide a huge step forward in the integration process and staff camaraderie. If S&OP is already active there is no harm in taking the best elements from both and moulding a freshly agreed process with widespread buy-in.

Warehousing & Logistics - Do not try and integrate these ahead of the IT and S&OP changes. There is no harm in allowing warehouses to operate in parallel for some time. Once you have your business processes stabilised you can move ahead to integration, simplification and cost saving here.

Distribution/RTM - many different Route To Market models exist and careful planning is needed when changing any aspect of customer/consumer interaction. Do you service Key Accounts direct? Do you need all those Distributors? A merger is an ideal opportunity to thoroughly evaluate the newly combined Distributor cadre. Some will obviously be better than others but you need a scientific and unemotional tool to assess this critical function.

Learning to live with a new partner is never going to be easy but you can minimise the stress by taking steps to integrate Supply Chains in a timely fashion.

 Post-merger Supply Chain  Integration


Tags: FMCG, Route to Market, Mergers & Acquisitions, Dave Jordan, Pharma, Private Equity, ERP/SAP, S&OP, Logistics Management, Distribution