Supply Chain Blog

Eurovision Song Contest, APO and.........ABBA!

Posted by Dave Jordan on Fri, May 17, 2019

There are many ways to link all the different planning activities in your FMCG/Pharma company. This could be done with one single tool like the SAP Advanced Planning Optimiser or a host of other tools and packages. SAP APO Small resized 600

As with all IT you need to know how to use the software in order to get the optimum performance for your company and that is not always best provided by the IT supplier. If you need help with your consolidated planning system then Enchange is ready to assist.

With the Eurovision Song Contest imminent and on the anniversary of ABBA winning with Waterloo a ridiculous 45 years ago, here is our take on that classic. In the lyrics below you can substitute the name of any IT package but APO does fit the tune well, I think.

With due reference to the original lyrics and music of ABBA.

Why why
Was our planning accurate no longer
It’s bad
And we knew we could not continue this way
Our products are not on the shelf
Poor data it speaks for itself 
APO – No guessing on planning any more
APO – Now planning demand is not a chore
APO – We now know exactly what to do
APO – Smooth functioning  S&OP needs you
APO -  Finally planning with APO

We were
Using monthly planning, but needed longer
Oh yeah
Balancing planning right along the chain seems so right
So why did we ever refuse
It’s a win-win that we choose
APO – No guessing on planning any more
APO – Now planning demand is not a chore
APO – We now know exactly what to do
APO – Smooth functioning  S&OP needs you
APO -  Finally planning with APO

And now we see real proof
Our sales have shot through the roof
APO – No guessing on planning any more
APO – Now planning demand is not a chore
APO – We now know exactly what to do
APO – Smooth functioning  S&OP needs you
APO -  Finally planning with APO

So, will your planning get a nul points or a massive 12?

Tags: Dave Jordan, Humour, Supply Chain, Forecasting & Demand Planning

Demand a Culture of Route to Market Excellence Through Outstanding Leadership

Posted by Ross Marie on Tue, Mar 19, 2019

There are many things I have seen in over 20 years in the unbelievably exciting Fast-Moving Consumer Goods Business (FMCG). There are many things I can talk about and stories I can tell. But since I was first handed the keys to a van in 1998 to stock shelves in retail, right up until my most recent board presentation to the global CEO of a FTSE 100 FMCG company, one thing has always remained constant, Leadership drives Culture


culture-leadership-rtm-finalWhat FMCG Leaders say, what they do, how they do it, and how they live it, drives company culture. In other words, it drives what we do and how we do it around here. If we want to deliver real change and improvement in Route to Market (RtM) excellence, the senior management team, from the CEO down, must fully buy into and demonstrate that change.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. The 20 Steps are split into 4 phases, Assessment, Strategy, Design and Implementation. My goal in creating the 20 Steps, and in writing these supporting blogs, is to provide FMCG leaders with a methodology or framework that will allow them to review, transform or build their RtM capability is a structured manner, covering all elements of the RtM strategy.

Over the past number of months, we have gone through the first 19 steps of my model. The focus of this post is the final Step 20 – ‘Culture & Leadership’. When we review, transform or build RtM capability, the journey will not be linear. I say this because Step 20 will not be the last thing you do, but it will drive the entire process. For example, Step 1 Review RtM Performance, involves looking at all the current elements across your RtM, you might say it involves reviewing your existing 20 Steps, including Culture & Leadership.

Here are some examples of questions you can ask under Step 20 – Culture & Leadership:

  1. Before you start your RtM journey, what is the leadership platform that will drive success? Do we have the active support of the CEO, for example?
  2. To what extent are senior management at regional or global level supportive? Who will sponsor the changes that will be required? If we do not have senior management’s active support, to what extent will we be able to drive meaningful change?
  3. Based on the results of Step 19 Functional Integration, what are the functions and departments within the organisation that have been identified and mapped out as key elements of the RtM Strategy?
  4. Have these functions and departments been involved in the RtM strategy process thus far? For example, could we rank the department involvement from a level 10 (heavily involved) down to level zero (not yet engaged with)?
  5. Who are the key individual influencers within the organisation whose opinion carries weight across key departments or functions? Have these individuals been involved in the RtM process thus far? To what level has their involvement been?
  6. Who are the key external stakeholders, whether affected by the change or not, that need to be involved?
  7. Is there specific buy in or agreement that we need to get, in order to make and facilitate these changes? Will any of the changes have any political, legal or governmental consequences?
  8. What does our overall stakeholder map look like? Do we feel there are any gaps?
  9. What are the key messages that we need to deliver to the organisation? For example, why did we start this process? What was the need that drove the change? What changes have we made? Why did we make them?
  10. How will this new approach impact our employees, on their departments and on the company? How will this improve our current position? How will these improvements better equip us for the future?
  11. How will these changes help us to beat the competition? How will these changes better equip us to service our customers? How will these changes be seen by our other external stakeholders?
  12. How will these changes effect company departments traditionally not seen as sales or RtM focused? How do we engage and bring them along on our journey?
  13. How would we describe the current company culture? How do we do things around here?
  14. How big a cultural shift are we trying to make? Are we moving from an autocratic style of management where the “boss” tells people what to do, over to an empowerment centric culture where we want to see the RtM front line staff create and build new ideas? What does the size and nature of this shift mean?
  15. In what timescale are we looking to make these changes? Is this realistic?
  16. What are the essential behaviours we want to see in the organisation to make the new RtM approach successful?
  17. How do we ensure that we are getting the essential behaviours across the organisation to deliver on our RtM strategy?
  18. Does all of the company executive committee, management board, top team, management team, etc., understand the new RtM approach and the rational for change? In other words, has the Senior Management (CEO/Managing Director, and all direct reports) been brought through the entire process to ensure active advocacy?
  19. How will the Senior Management group show their support for the new RtM approach? Will there be a specific launch of the new approach? How will they be involved? What are follow up phases to this launch? How does the entire organisation see this advocacy and Leadership come to life?
  20. What is the overall change management plan to win the necessary stakeholder buy in to deliver RtM Excellence?

I would like to thank you very much for reading any or all of my blog series on the 20 Steps to Route to Market Excellence. I hope you find this useful, and any views and comments are most welcome. Although this is the final step in the framework, we will continue to discuss key RtM issues over the coming weeks and months.

Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: SKU, Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Communication, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Break Down Departmental Silos Through Functional Integration for Route to Market Success

Posted by Ross Marie on Fri, Feb 15, 2019

The FMCG business is like a team sport. There are sales people sent into the field, to sell more products and beat their targets. There are players put on the sports field, charged with scoring points and winning the game. In both scenarios, if the people behind the scenes don’t do their job, those on the front line can’t deliver. It’s that simple.

functional-integration-rtm

Route to Market (RtM) professionals need inventory to fulfill orders, budgets to execute Key Account agreements, Point of Sale (POS) material to help increase sales, devices to record information, take orders and communicate, vehicles to visit customers, etc. The RtM/Sales or TM&D (Trade Marketing & Distribution) function must have clear and open two-way communication with all the other business functions. Functional Integration is a cornerstone to any successful RtM strategy.

My first lesson in the need for Functional Integration came when I was a Sales Rep for an FMCG multinational in the late 1990’s. The Marketing Department was doing a big push for one specific brand. They sent every rep a large package of POS material with clear instructions to place it in retail. The main POS material was a cash mat. Cash mats are designed to be placed next to the till, on the counter between the retailer and the consumer, and are where the retailer can place notes and coins as part of the consumers change from their order. They protect the retailers counter, make it easier for the consumer to pick up their change and they can provide a great opportunity to communicate with the consumer at the actual point of purchase.

These particular cash mats were beautiful pieces of POS material. They were very high quality, the message they communicated was very clear and they were also very durable. But there was one big problem. They didn’t fit into the available space in the retail stores. There had been no interaction, consultation, or communication between the RtM function and the marketing function during their development. A lot of money could have been saved if there had been proper Functional Integration.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 18 steps of my model. The focus of this post is Step 19 – ‘Functional Integration’.

Here are some examples of questions you can ask under Step 19 – Functional Integration:

  1. Based on the RtM Review in Step 1, what are the other business functions that your RtM, Sales or TM&D department currently interacts with? Have you explicitly identified them?
  2. Are there currently ‘rules of engagement’ for the different interactions with the other functions, or has it just evolved?
  3. For each business function or department, to what extent have we identified the nature of the integration required? For example, what key processes are involved? What are the related process inputs and outputs? Have levels of inter-departmental performance been defined? Are these levels of performance explicit? If so, how has performance been defined? Do internal Service Level Agreements (SLAs) exist, for example?
  4. Based on the new RtM Strategy in Step 5, how will the functional interaction with the RtM department and other functions change? What new rules of engagement need to be established? How will this be measured?
  5. What is the nature of the integration with Supply Chain? How do we feed information into the Supply Chain Department? For example, who decides what the demand will be over the next few months? What are the implications for the Logistics Department? Has the RtM Department fed into these processes?
  6. Do we have an S&OP (Sales & Operational Planning) Process? Has the RtM Department fully bought into this process? Are we represented in it? Is it clear what information we should feed into this process? For example, what is the role of the RtM Department in the Demand Review Process?
  7. Who receives our information on Out of Stocks in the field? What actions are taken based on this? How do we prevent them? What help do we need to do this?
  8. Do we accept product returns from customers? If so, who manages this process and what departments interact with this?
  9. How does the RtM department interact with the Brand Marketing department? Has this process been formalised? How often do representatives from the marketing department attend trade field visits?
  10. Does the RtM Department feed into Point of Sale (POS) material development? If not, why not?
  11. Do we place any promotional trade assents in the field? Who manages this process? Who provides feedback on their applicability and usefulness? Who tracks and manages them as assets of the business? What is our process for this and which function is responsible?
  12. How does the RtM Department interact with the Finance Department? Who sets prices, margins, budgets and discounts within the RtM department? How does Finance fit in with this? How do we currently feed trade information into Finance? How will this change under any new RtM Strategy?
  13. How do we open new accounts with customers? Are any other departments involved? Who sets payments terms? Do we offer credit? Who then sets individual customer credit limits? How does the RtM department feed information into this?
  14. How do we collect payment from our customers? Is it all electronic? Do we accept any other forms of payment? Do we accept cash? What are the processes and procedures for this? Which departments are involved? Do we have a Security or Health & Safety Department or Function? Is this part of HR? How do we interact with them?
  15. How do we interact with the IT department? Do we have a CRM solution or hand-held device that is used to take orders and record market data? Who maintains this? Who feeds them information about its real-world application and actual issues?
  16. How does the RtM Department interact with the HR Department? For example, do we have a system for performance appraisals? Who is responsible for RtM Training & Development? Who manages performance appraisals? How do receive the company policies & procedures? How can or do we feedback on them?
  17. Who manages our company equipment, like cars, phones, tablets, laptops, uniforms, etc? How do we provide feedback on these? To whom?
  18. How does the RtM Department interact with the corporate/public affairs or PR department? For example, how often do they make trade visits? How do we feed information to them? How can they speak publicly or address key issues about our products or communications, without speaking to the department who deals with our customers?
  19. How open are we as a department? Do we have regular conferences and regular meetings? Do we invite other departments? Do we actively manage our relationship with other departments? Do we try to attend other departments key meetings?
  20. What is our plan to on board the other company functions to our new approach to RtM? Have we consulted them throughout the process to accelerate buy in? Have we looked at which specific areas within the 20 Steps to RtM Excellence will impact on which specific functions?
  21. What is the overall strategy to ensure the RtM Function is integrated with all necessary departments and functions across the organisation?

I hope you find this useful, and any views and comments are most welcome.

Next, I will cover the final step, Step 20 ‘Culture & Leadership’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, SKU, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, S&OP, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Inventory Management & Stock Control, Information, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Smash Your Route to Market Targets with Essential Training & Platforms to Capture and Share Success

Posted by Ross Marie on Fri, Feb 08, 2019

Welcome to my blog series on Route to Market (RtM), which includes Sales, TM&D (Trade Marketing & Distribution), in the Fast-Moving Consumer Goods (FMCG) sector. I have created a model called the 20 Steps to Route to Market Excellence.

rtm-training-upgreading-draft2The purpose of which is the provide FMCG leaders with a framework to develop, review and/or build their RtM capability. The model is not prescriptive but offers guidance around the areas that could be examined, and my blog posts should be used to stimulate ideas for each step.

Over the past number of months, we have gone through the first 17 steps of my model. The focus of this post is Step 18 ‘Training & Upgrading’.

Training in RtM means examining each area within the RtM strategy, or in this case, reviewing each Step in the 20 Steps to RtM Excellence Model, and detailing the exact training requirements, who requires training, who will deliver the training and when and how it will be delivered.

Upgrading refers to an approach to ensure Continuous Improvement and innovation across our RtM. It encourages new ideas and approaches to be developed, tested, captured, evaluated, rolled out and monitored across the RtM approach. We often refer to this process as NRD (New RtM Development). This is how we spread success and capture entrepreneurial flare, in the largest and even most structured organisations.

The aim is to give our people the tools and empower them in the most effective ways.

Here are some examples of questions you can ask under Step 18 – Training & Upgrading:

  1. What are the current training programmes already in place covering RtM? How many are internal training and how many are those that require an external trainer? To what extent have we identified any training gaps in the RtM space?
  2. Based on the previous Steps in the 20 Steps to RtM Excellence, what are the training requirements arising to support each step? For example, do we have the competency to conduct Distributor Assessments? If not, what are the training requirements here?
  3. We have an agreed approach to RtM, based on Step 5. As such what are the key areas that we feel will require training? Where are the major differences in approach that require the development of new competencies? What are the related training requirements?
  4. Who classified our retail universe? Did we do this internally or use an outsourced resource? How will this be maintained? What training is required to maximise its usage and to keep the outlet classifications up-to-date?
  5. How did we design our channel classification? What does each channel mean in terms of activities, call frequencies, investment, volume, targets, in other words what are the rules? What are the related training requirements that apply?
  6. What does our approach to territory planning mean for the entire RtM team? How does it impact on their roles? Is our approach to RtM target setting fully understood? Has it changed? What is our approach to Revenue Management? What are the TM&D budgetary controls and processes? What are the training requirements to all of these key issues?
  7. How do we currently train our field force? Do we use the ‘steps of the call’ method? Do our sales teams use technology in the field? Do they know how to maximise its use? What are the related training requirements?
  8. Is our approach to sales incentives fully understood? Have we made recent changes to the scheme? Does our RtM team understand our tool kits, how and when to use them? What are the training requirements here?
  9. How have our trade incentives changed? Do we use 3DPs and do our TM&D team understand how to maximise their benefits? Do they understand how to develop and run partnership programmes with distributors? What are the training needs here?
  10. How has our approach to Key Account Management (KAM) changed? How do we ensure our KAM approach is fully understood by the entire TM&D team? How do we approach negotiation training in KAM and the wider TM&D team?
  11. How do we roll out our NRD (New RtM Development) approach and how do we train the TM&D team? How do encourage, foster and achieve cross-functional integration?
  12. What mechanisms have we considered for training? For example, will all members of the RtM team be trained together? To what extent is individual training support needed? To what extent are the training and development needs of individuals identified as part of performance management? Is this routinely considered as part of performance appraisals? If not, why not? Will there be specific programmes designed for field force representatives and back office RtM staff?
  13. Who owns the RtM training process and related programmes? To what extent is it driven by Human Resources?
  14. To what extent is performance evaluation and related training and development needs part of the Organisation’s or Sales Department’s culture?
  15. Who will deliver the training? How will this vary across each of the steps? What are the internal training capabilities? Do we have resources that we can call on in our wider company, maybe at HQ or centre of excellence level? If we need to look external for training requirements, do the required skills exist locally in our market?
  16. What is the overall training plan covering each Step? What is the related training plan and schedule?
  17. What is the overall plan for the development and upgrading of skills related to RtM? What is our NRD (New RtM Development) approach?
  18. What are the rules of the NRD process?
  19. Do we currently have a process around empowering our TM&D team to develop new RtM ideas and solutions? If not, how do we introduce this new or redeveloped concept?
  20. How do we test new RtM ideas? What is the process for this? Where does the budget come from? How is this monitored?
  21. How do we define NRD success? Who determines this and upon which criteria it is based?
  22. What happens to the successful and performing NRD ideas? How are these rolled out? To what extent are they rolled out? Are they rolled out, for example, nationally, regionally, selected territories or channels?
  23. How do we measure results from the NRD roll-out? At what point does NRD become business as usual? Are there specific hurdle rates that need to be passed? Who determines this?
  24. What is our process for continuous monitoring and re-evaluation of rolled out NRD ideas?
  25. What is our overall approach and strategy for Upgrading/NRD?

I hope you find this useful, and any views and comments are most welcome.

Next, I will cover Step 19 ‘Functional Integration’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Sales, Distribution, RTM Assessment Tool, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Improve Your Key Account Management Approach with these Vital Tips for Route to Market Success

Posted by Ross Marie on Thu, Jan 31, 2019

Key Account Management (KAM) is how Route to Market (RtM) leaders effectively and efficiently manage the relationship with specific and strategic customers, or customer groupings, to deliver on RtM targets.

 

key-account-management-rtm-3-webCustomers are classified as Key Accounts based on a variety of reasons. For example, it could be because they have a large numbers of retail outlets all branded under the one name. It could be that they operate several bars and restaurants, that are of key importance for delivering your RtM Targets. Your wider organisation may also mandate that specific global customers are treated in a certain way. There could also be dozens of market specific reasons why you might assign a customer(s) as a Key Account.

Regardless of why a customer is assigned to KAM, the important issue is, how they are managed, how the relationship is nourished, how their growth plans are implemented and how they are serviced across our organisation. The central element to KAM is relationship.

Success in KAM Management requires careful consideration, especially if you are either new to the concept of KAM, or if you feel your organisation is not doing it right.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 16 steps of my model. The focus of this post is Step 17 ‘Key Account Management (KAM)’.

Here are some examples of questions you can ask when reviewing, developing or building your Key Account Management (KAM) department or approach:

  1. Based on the RtM Strategy chosen on Step 5 and the Channel Classification in Step 7, what is our desired approach to Key Account Management?
  2. On what basis do we determine that a customer falls into the KAM arena? Is this based on size, current performance, volume, uniformity, number of outlets, ownership of outlets, location of outlets, strategic importance, etc.?
  3. If the customer has a KAM classification in other markets that we or our parent company operate in, does that have a bearing on our local classification?
  4. Will we have different levels of KAM classification? For example, should we assign the label of ‘National Accounts’ to our larger national hypermarket retailers, who have a presence across our market? Or might we assign the label of ‘Key Accounts’ to some regional larger retailers who have multiple stores in one area of our market?
  5. Where does Channel Management fit into KAM? Will we classify our business or customers into Modern Trade and Traditional or General Trade? Will KAM sit into one or both of these channels?
  6. What proportion of our overall business is Key Accounts (as opposed to the Traditional or General Trade)? How to we expect this proportion to develop in the coming years? How will this shape our approach to KAM?
  7. Will there be a RtM manager who has overall responsibility for Key Accounts regardless of which Channel, Area or Region the Key Account is in?
  8. What might this RtM manager have responsibility for? For example, would they manage and be responsible for volume, display, product range, training, strategic approach, relationship, negotiation, reporting, targeting, budgets, etc.)?
  9. Based on our Competitor Analysis in Step 4, how does our competition view KAM? Are there any learnings for us in their approach, or does their approach change our own?
  10. Do we treat all Channels and/or Key Accounts in the same way? For example, will the distributors and cash and carry’s or wholesalers in one region of the country be managed differently than in another? Will this be reflected in the structure? Would the distributors in the North of country be managed by a Key Account Manager who reports to a RtM Manager with responsibility for the North?
  11. Are we clear about the types of individuals who will manage or become Key Account Managers? Do we have specific criteria? What is it? Have we properly weighted the importance of relationship building in looking at individuals?
  12. Where does Key Account Management sit in the organisation structure? What is the relationship between KAM and the RtM field force who potentially manage and call on the individual outlets? How is communication managed between the two? In practice, do they really talk to each other or limit themselves to mandated reporting and communication?
  13. Are we clear about the levels of importance of each channel or Key Account? Have we taken into account all RtM Targets, including strategic importance to us? Have we looked at this importance/power angle from the side of the customer? How important or necessary are we to them? How does this feed into negotiation?
  14. Do we have detailed Key Account Plans for each account? Does this clearly detail what our objectives and targets are for each account? Have we worked with the account in developing these? Have we worked with the internal stakeholders who will and can influence these? Do we simply want engagement with the account, or partnership, or preferred partnership, or exclusivity? Have we looked at previous years plans and taken learnings from them? Do we include what our individual account’s future plans or aspirations are?
  15. Do our Key Account Plans cover all areas of engagement between our two organisations, for example top to top meetings, Key Account reviews, wider RtM team interaction at customer level (e.g. retail or distributor), corporate entertainment/relationship building, order placement, deliveries, feedback on promotions, information sharing (e.g. sales/EPOS data), authority/empowerment, invoicing, seasonality factors, etc.?
  16. What is our approach to negotiating Key Account Agreements? When will they be negotiated? Who will be in the room from our side? Who has the authority to negotiate and to agree?
  17. What happens in the event of a stalemate or breakdown during Key Account agreement negotiation? What will the layers of escalation be? What is our approach to negotiation training?
  18. Do we have a full negotiation strategy per Key Account covering all elements of the agreement and estimated potential scenarios? Has this been agreed and signed off by all stakeholders?
  19. How are we currently rewarding or incentivising Key Accounts? What is the current reward mechanism, e.g. rebate, discount, payment etc.? Is it based on volume or revenue or profit or other RtM targets? What is the potential role of Third Degree Partnerships (3DPs) here?
  20. What role does margin play in our relationship with our Key Accounts? Do we have the control to set it? What are the internal and/or external factors that may affect our ability to set our pricing and margins?
  21. How do we manage and control Key Account investment? Who manages this? How do we determine levels of investment per Key Account?
  22. What payment terms do we operate across our RtM? How do payment terms fit into KAM? Do we have specific payment term targets, by account, by region, by channel, by customer? Do we have the mechanisms in place to facilitate the different forms of electronic payment? Do we have minimum acceptable payment standards? What is our overall approach to payment terms in relation to KAM?
  23. Which of our Channels and Key Accounts are growing? Which are declining? How is this reflected in our overall strategic and individual approach to KAM?
  24. How do we capture learnings across KAM? Do we have a process for capturing success in one account and replicating it in another?
  25. What is our overall approach to KAM? What is our implementation plan for rolling this out?

I hope you find this useful, and any views and comments are most welcome.

Next, I will cover Step 18 ‘Training & Upgrading’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, SKU, Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, S&OP, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Compliance, Information, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Form Lasting Alliances with Key FMCG Customers at Almost Zero Cost, How? - Third Degree Partnerships (3DPs)

Posted by Ross Marie on Mon, Jan 28, 2019

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the detail of the first 15 steps of my model. The focus of this post is Step 16 ‘Third Degree Partnerships (3DPs)’.

Step 16 represents a different concept and approach to motivating your customers to want to deliver on your targets. I hope it is helpful, and I welcome any feedback. So, what are Third Degree Partnerships (3DPs)?

incentives for fmcg customers with third degree partnerships in rtm

Third Degree Partnerships (3DPs) are where a Fast-Moving Consumer Goods (FMCG) company identifies its customers key issues, costs or constraints, and then forms a partnership with a service provider who can solve them for the customer, at a significantly reduced cost.

The benefit for the customer is access to cheaper services. The benefit for the service provider is access to more customers. The benefit for the FMCG company is the ability to use the provision of a 3DP service as if it was a trading term or key account payment to the customer, with almost zero cost.

In short, we identify our customers key issues, we then identify a service provider who can solve them, and we use our size and clout (maybe even our global reach?) to negotiate a much-improved price or access to the service for our customers. We then decide what we want in return for providing our customers with access to this 3DP club.

What would we want in return? Examples include, product listings, exclusivity of some form, increased product range, pricing or other promotions, improved display, minimum volume targets, brand dialogue, use of a new distributor, access to a territory, etc.

Why would you use 3DPs instead of a cash payment or discount? Several potential reasons. For example, maybe you have significant pressure on Route to Market (RtM) budgets and need to spend less in the key account or customer payments area. Maybe you need access to a new strategic channel and the costs of entry would eliminate profitability. Maybe you are facing pressure and need to boost sales but have no budget for promotions. Maybe you are facing significant competition and need a fresh approach to work with certain customers.

Think of 3DPs as a type of rewards club for our customers. They may require time to set up but have little associated cost for us as FMCG leaders, provided we do the ground work.

Here are some examples of questions you can ask under Step 16 ‘Third Degree Partnerships (3DPs)’:

  1. Based on the Channel Classification in Step 7, what are the different segments of customers in our market?
  2. Looking at each customer segment, which are the most appropriate or suitable for 3DPs? Where will 3DPs have the most potential value or be the most valued?
  3. Would there be a greater applicability in the less organised General Trade versus the more organised Modern Trade, for example?
  4. Do we feel providing our Horeca owners with access to reduced cost services will be as beneficial as providing reduced cost services to international retailers?
  5. Could the customers in question get access to these reduced cost services themselves? If so, why have they not done so? Is there still a value in these services?
  6. Is there any specific channel in which we are under-performing? What are the reasons for this? What are the defining characteristics of the channel? Could a 3DP help us here?
  7. Have we included and looked at the specific geographic issues, challenges and nuances within our specific market, to map out our local customers’ challenges? For example, the islands of Indonesia, the congestion in Bangkok, the vast geography of African countries, the severe temperatures in Russia, to name a few?
  8. Considering each customer segment, what are the customers’ key issues, costs or constraints? In other words, what are the problems our customers are facing for which we could provide solutions?
  9. Looking at each of these key issues, costs or constraints, can we identify service providers who can solve these?
  10. Are these potential service providers local to the market? Is there a potential for us to bring in external suppliers to the market? Would we want to do that? Does that create more issues for us in setting up the 3DP or does it make the 3DP more powerful?
  11. Can bringing in external service providers as part of a 3DP create barriers to entry for our competition and barriers to exit from the 3DP for our customers?
  12. Are there particular services that we, as an FMCG company, benefit from, that we can in turn provide to our customers through 3DPs? Can we use our size and scale to negotiate a package or price and offer access to our customers in return for something?
  13. What services might we offer as a 3DP? For more inspiration, download our Implementing Third Degree Partnerships (3DPs) in Route to Market Guide here.
  14. Have we prioritised the potential services that we may offer as part of our 3DPs? Have we ensured that the 3DP programme will not reduce focus from achieving our RtM targets but instead assist with them?
  15. Have we looked at why we would use a 3DP instead of another incentive? Have we detailed what we would ask for in return for access to a 3DP?
  16. How will the 3DP programme be managed? Will key accounts manage the programme? Will we require additional resources in the RtM function to do this? Must this be done on a national level or will we allow regional implementation?
  17. Have we involved our legal colleagues in the contracting process to make sure there is no exposure for us from the services provided by the service provider(s)?
  18. Have we conducted a risk assessment to look at any specific local or other issues that may affect the 3DP programme?
  19. Taking all the above into account, what would the overall 3DP programme look like?

I hope you find this useful, and as I said, views and comments are most welcome.

Next, I will cover Step 17 ‘Key Account Management (KAM)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

 

3rd degree partnership download

 

Tags: Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Doing Business in Africa, Communication, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Beat the FMCG Competition with an Outstanding Distributor Partnership Programme

Posted by Ross Marie on Fri, Jan 18, 2019

A Distributor Partnership Programme, if designed and implemented correctly, can be one of the most powerful tools in the Route to Market (RtM) armory for delivering sales growth.

distributor-partnership-programme-webA Distributor Partnership Programme sets out which individual distributors or distribution network(s) you will work with. It details, ideally within individual simple Distributor Development Plans, how you will work with them, what specific areas they need to improve on, exactly what they need to deliver and what is in it for them. All of this will be done with the back drop of the specific market you operate in, set against agreed timelines, and the programme must map out a win/win for all sides.

The Distributor Partnership Programme works best as part of an overall RtM improvement plan, but at the very least needs to be coupled with Distributor Assessments, which I covered in an earlier post. Once we have assessed what we already have/what is out there, we can then decide who, and on what basis, we want to partner.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 14 steps of my model. The focus of this post is Step 15 ‘Distributor Partnership Programme’.

Here are some examples of questions you can ask under Step 15 ‘Distributor Partnership Programme’:

  1. Based on the RtM Strategy & the 4D Approach chosen in Step 5, what is our DIME approach for our Route to Market?
  2. What is a reasonable expectation of our distributors? Have we defined exactly what this is in terms of process and performance? Have we included sales processes, logistics performance and back office performance? How do we measure this?
  3. Based on the Distributor Assessment in Step 3, how many of our current distributors do we want to continue to work with? What is the minimal size of a viable distributor, including the ability to fund any required investment? What is the optimum number of distributors? What is the current contractual arrangement with our current distributors?
  4. How many of our current distributors are we looking to end our relationship with? Upon what basis can we make such a judgement? What is the current contractual arrangement with them? What is our approach and plan for ending this relationship? Will there be financial or other implications to ending any relationships?
  5. Have we conducted a risk and continuity of supply assessment? Have we included factors such as resource (specifically cost), product supply, politics, competition, timing, future relationship, perception, etc.?
  6. Will we look to engage with any new distributors? What criteria will we use to make these decisions? Who are these new distributors? What is our engagement plan with them?
  7. Are we currently operating on an exclusive distribution system? If not, is that something we have identified as a priority going forward? If not, how will we manage potential conflicts that could arise?
  8. Have we considered the output of our Competitor Analysis in Step 4? What impact will this have on, for example, looking at distributor exclusivity, starting and ending relationships, distributor development plans, etc.?
  9. Based on the Distributor Assessment in Step 3, what does our ideal or model distributor look like? What criteria are we using to create this ideal distributor? Have we taken local geographic, technological, political and economic conditions and nuances into account? What does the Balance Sheet of a Model Distributor look like?
  10. Based our RtM targets identified in Step 5, and looking across all of our distributors, existing and new, what will the Distributor Development Plans of each distributor look like?
  11. Will the Distributor Development Plans include areas of, for example, geographic coverage, number of vehicles, availability of data, inventory levels, reporting, calls per day, steps of the call, route planning, flexibility (e.g. new brand launches), brand distribution criteria, point of sale material placement, planogramming, display, brand dialogue, promotions, pricing, product returns/complaints, retailer engagement, to name a few?
  12. Out of these Distributor Development Plans, do we have a simple specific strategy for each distributor – e.g. defend / increase market share, improve selling processes, develop or expand van selling etc.?
  13. What will our partnership programme look like? What criteria will we use and how will this be measured? Will we categorise distributors into different performance categories? If so, what will these categories look like, how many will we have and how will this be measured?
  14. What will the rewards in the partnership programme be? Will we use a discount system, a rebate system, a prize-based system, a combination of these, etc.?
  15. Have we considered budgetary factors? Will this be self-financing through volume gains? Have we mapped out the success of different scenarios to fully uncover maximum cost exposure?
  16. Will we differentiate distributors based on, for example, size, volume, market share, reach, coverage, reporting, data, access, etc.?
  17. Will this be a national programme? Will we need a pilot in one region for example? Will we allow geographic nuances and differences to be considered? Will here be any effect on headcount in the RtM team to support the programme? Will we need specific Distributor Development roles, or will these activities be accommodated in BAU?
  18. What will the training programme be for our key account and RtM team? What is our roll out plan for this?
  19. Have we developed new SLAs or key account agreements to take account of the above?
  20. All Distributor Programmes should increase sales and market sharer, so what expectations do we have for our programme?
  21. Based on all the above, what is the implementation & engagement plan for the Distributor Partnership Programme?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 16 ‘Third Degree Partnerships (3DPs)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, SKU, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Logistics Management, Sales, Distribution, RTM Assessment Tool, Inventory Management & Stock Control, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

How to Master Technology in Route to Market Strategy to Save Resources and Fuel Sales

Posted by Ross Marie on Fri, Jan 11, 2019

When we discuss Technology in terms of Route to Market (RtM) Strategy we are looking at our overall approach to and use of Technology at every stage of our RtM Strategy and Execution.

rtm-technology-webThis includes, for example, the hand-held system we take orders on, the ERP system the company uses, the tracking method we have for targeting the RtM team, the way we measure and track our key account agreements, how we optimise our route planning, and everything else across the RtM space.

The key in many cases will be minimising the number of systems we use, facilitating their integration, ensuring their simplicity and allowing them to minimise human intervention.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 13 steps of my model. The purpose of my blog series is to stimulate your thought processes around RtM, and to allow a moment to think and to ask some key questions. The focus of this post is Step 14 ‘Technology’.

Here are some examples of questions you can ask under Step 14 ‘Technology’:

  1. Based on the RtM Review in Step 1, what is our current approach to and use of Technology across our Route to Market?
  2. What is the Systems Landscape operating across our RtM function? To what extent are the systems integrated?
  3. Do we use an ERP system? Is this linked to any other RtM systems? How does this integration work? Have we adopted systems that are no longer fit for purpose?
  4. Do we get distributor, customer or third-party sales data? If so, what do we do with this? Is this fed into our own RtM system? Can we measure and report on this? What manual intervention is involved?
  5. What is our use of spreadsheets across the RtM function, including strategy, execution, monitoring and reporting? How many different departments are using them? Have we looked at this aspect in the past and what view did we take at the time? To what extent are we managing the risks associated with spreadsheet usage?
  6. What is the current order capture method? Do we use a CRM? Do we use a hand held, tablet or phone? If so, what is their current ease of use and performance? How integrated is the order capture method into the overall company system(s)?
  7. What systems for we use to monitor the performance of our RtM representatives? For example, do we know how many calls they are doing per day, what their location is at any given time, what their stock levels are, etc.?
  8. Do we track our distribution and RtM vehicles electronically? If so, what do we do with the data?
  9. Do we have a solution for setting and monitoring our RtM targets? Is this automated and integrated into our overall RtM system?
  10. How do we measure product display across our retail, Horeca and customer network? Is there a technology solution for this?
  11. How do we track, monitor and report on compliance to customer agreements, whether they are national trading terms with key accounts, of single store contracts?
  12. Do we have any connectivity constraints in our marketplace? Does our RtM team have access to mobile/cellular data across the country or does connectivity wait until the end of the day? How does this impact on our approach to Technology?
  13. Do we use RtM data analytics across our RtM? If so, what do we do with the data? If not, have we looked at this in the past? What are our next steps for RtM data analytics?
  14. Do we have a solution for capturing cost to serve data across the RtM? Is this a simple automated process or does it require manual intervention? If so why? What are we doing with this information?
  15. To what extent do we use technology to set up sales territories and look at route planning? If not, why not? If we do use Technology here, what have the results been?
  16. What is the current amount of time our RtM team spends using technology? Is this what we want and expect? Is this the best use of the RtM team’s time or have we over complicated any process?
  17. Do we use social media and other form of digital marketing for RtM? Does it form an integrated part of our RtM strategy or has it been deployed in silo from other RtM initiatives? What have we used it for and what have the results been? Who in the organisation uses social media for RtM? Do we have a clear strategy and guidelines in place for the use of digital tools?
  18. Do we train our RtM team on all aspects of Technology that we use in RtM strategy and execution? Is it very clear which aspects of Technology are ‘in scope’ and ‘out of scope’ for certain roles/departments?
  19. Does our RtM team currently employ workarounds due to current system set up?
  20. What are the current technology gaps in our RtM? Where are the manual processes that need to be automated? On the other hand, are their examples where we are over complicating an area or issue for the sake of technology?
  21. Given all the above, what is our overall Technology plan across the RtM, Sales and/or Trade Marketing and Distribution function?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 15 ‘Distributor Partnership Programme’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: SKU, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Information, Retail, RTM, Promotions, ERP, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Realise Route to Market Excellence with a First-Class Trade Incentive Programme

Posted by Ross Marie on Wed, Dec 19, 2018

What are Trade Incentive Programmes (TIPs)? TIPs are the mechanisms that you put in place to incentivise and encourage your trade partners (e.g. retail, distributor, cash & carry, wholesale, Horeca) to engage with and deliver on your Trade Marketing & Distribution (TM&D) and/or Route to Market (RtM) objectives.

trade-incentive-programme-for-rtm-success

TIPs can include what may traditionally be associated with key account agreements, like sales volume discounts, or sales volume rebates. But they should also encompass so much more.

Whilst sales volume may be one of the most important KPIs, incentivising on it alone, or being too reliant upon it, may be counterproductive in the long term. For example, we may encourage certain customers to forward buy, thus bringing sales from next month or next period into this one, and therefore costing us more now, in terms of higher incentives, poor productivity and increased overall supply chain costs.

But focusing our TIPs on the individual trade marketing objectives (the building blocks of sales volume), can really help us to engage with and become partners of the FMCG trade, both with the owners, and in many cases more importantly, their staff.

A well thought out TIP can start to create real trade partnership with our company, encouraging and motivating those who want to work with us for mutual success, rather than customers who simply expect a discount.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 12 steps of my model. The focus of this post is Step 13 ‘Trade Incentive Programme (TIPs)’.

Here are some examples of questions you can ask under Step 13 ‘Trade Incentive Programme (TIPs)’:

  1. Based on the RtM Review in Step 1, what are the current TIPs we have in place? What have their results been?
  2. To what extent does our TIP accurately reflect and support our channel strategy?
  3. Who are the current TIPs focused on? Who within the trade are they incentivising?
  4. Are the current TIPs focused on, for example, the owners of a retail chain, on the managers or operators of the retail stores or do they focus on the staff?
  5. Do we operate different TIPs based on whether the outlet is owner operated or managed by the owner’s staff?
  6. Do we have a different TIP approach based on channel? If so, what is that approach and how do they differ?
  7. What are the current TIPs trying to deliver? Are they based on volume, on achieving a target, on running promotions, on brand knowledge, on brand range, on product presentation, on pricing, on display, on exclusivity, on anything else?
  8. What incentives do we offer in these TIPs? Have we had the same incentives in place for a long time? Have we asked the target audience if they have any views on our incentives?
  9. What TIPs do our competition use? To what extent have they achieved success with them? Is there anything we can learn from their TIPs?
  10. How are our TIPs measured? What does success look like? How do we measure their usage by the TM&D team, their implementation, their success? Do we use mystery shopper programmes?
  11. Do we receive data from our trade partners on the implementation and results of TIPs? Is the receiving of data a condition of the current TIP?
  12. Who coordinates TIPs? Is there a centralised approach? Do we have a policy and an agreed process for TIPs? Do we have a key accounts department? Do they have control or oversite of TIPs or do they keep focus to key account agreements and trading terms? Where do these cross over and how is this managed?
  13. Who implements TIPs? Is it done centrally at HQ, is it done by channel, by key account, by region?
  14. Can a trade marketing representative or territory manager implement and run TIPs in their own patch? If so, who coordinates that approach?
  15. Are TIPs used to create and foster a culture of empowerment across our TM&D/RtM teams? Are we capturing the learning from TIP successes in one geography to allow us to roll this out to others?
  16. Do we have the ability to test market our TIPs in specific geographies?
  17. Who holds the budget for TIPs? How is it controlled and managed? Is it one central budget or, for example, split up by geography or by channel?
  18. Can a TIP be run at a local level in a modern trade outlet where there is a central key account approach? If not, then why not? If yes, then how is this managed? What is the link to key accounts? Is there an agreed process and communication set up?
  19. How does the above inform our approach to future TIPs? What is our overall approach to TIPs and their management?
  20. What will our TIP training needs be and how will this be translated into our training programme?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 14 ‘Technology’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Empowering Sales People with the Right Trade Tool Kit Can be Spectacular

Posted by Ross Marie on Fri, Dec 14, 2018

Firstly, what are Trade Tool Kits? They are the specific commercial tools and materials that we provide to our Trade Marketing & Distribution/Route to Market (RtM) teams to help get their jobs done and to deliver on their targets. They are the trade incentive schemes, CRM systems, planograms, promotions, budgets, pricing initiatives, trade samples, etc. that they will implement, create, manage and report on.

fmcg-sales-toolkit-web

They are shared across the Trade Marketing & Distribution Team (TM&D Team). The TM&D Team in this case can include the Trade Marketing, Distribution, Sales, Merchandising, Promotions, Horeca, Events, Key Account, Customer Service and Telemarketing Representatives.

Much of the focus of Trade Tool Kits will be around providing “stuff” that the TM&D Team can “put” in the field to increase sales. But Trade Tool Kits can be so much more. They can effectively harness the creative power of every member of the TM&D Team by empowering them to look at, and examine, what they believe might work for their customers in their geography. Trade Tool Kits can be used to foster a culture where we believe in our TM&D Team and want them to contribute. I have seen this first hand and it can be amazing. This does not take away from the ABCs of what a Sales Rep should and must do, but maybe they can do more?

In summary, Trade Tool Kits can be the difference between an average TM&D Team and a Great one.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 11 steps of my model. The focus of this post is Step 12, ‘Trade Tool Kit’.

Here are some examples of questions you can ask under Step 12, ‘Trade Tool Kit’:

  1. Based on the RtM Review in Step 1, what are the current Trade Tool Kits we have in place?
  2. Are the TM&D team empowered to conduct their own promotions & trade incentive programmes?
  3. Does the TM&D team have a specific budget for in field promotions or events? How is the monitored and measured? Has training been given? How is success captured and replicated?
  4. Can the TM&D team run local territory incentives with selected customers? Do they have guidelines or training for this?
  5. Does the TM&D team launch, manage and/or implement pricing initiatives? If so, what controls are in place for this? Can they be done on a territory/area or regional basis or is this a national implementation? What materials are provided to the TM&D team for this and how are they managed and tracked?
  6. Do we differentiate trade engagement with owners from trade engagement with staff or operators? Do we see any difference? Have we trained our TM&D team on trade engagement?
  7. What Point of Sale (POS) material does the TM&D team have to place? Do they have guidelines on placement, duration, how to record placement, how to record effectiveness? Are we in regular contact with colleagues in Marketing to refresh and provide feedback on POS material?
  8. Does the TM&D team have or use planograms? Have they been trained on these? How to they monitor or record instore display? How often are they updated?
  9. What is the order capture method? Do they use an electronic method? What tools have the TM&D team been given to monitor their accounts? Are these tools well understood?
  10. Does the TM&D team have a CRM solution? Is this common across all roles? Does management have real time access to the CRM tool, its data, and its ability to set and monitor tasks?
  11. Does the TM&D team have laptops or tablets for use in the field? Does the TM&D team have access to customer data with the ability to conduct business and performance reviews? Have they been trained to do this? Is this a role requirement, is it encouraged, or does it fall out of scope?
  12. Does more than one member of the TM&D team share responsibility for a customer or group of customers? If so, what are the rules or guidelines in place for this? How does this effect the use of trade tool kits?
  13. Who in the TM&D team deals with customer complaints? How do we capture and monitor complaints? Can we report on resolution?
  14. Who in the TM&D team opens new accounts? Is there a clear process and system for this?
  15. How do credit limits get set for each customer? What tools are in place to monitor and inform the TM&D team?
  16. Does the TM&D team get involved in invoicing or payment collection? Do we accept cash? If so, what is our process for this and how effective are controls? Do we provide tools for this?
  17. Do we provide product samples to the TM&D team? Is this on a regular basis? How are they monitored or controlled? Are the TM&D team given additional samples at any time, e.g. around specific promotions or brand launches or events? If so, how are these monitored?
  18. Does the TM&D team accept, manage or control product returns? If so, what is the system in place and what are the tools for doing this? What is its effectiveness?
  19. Do the TM&D team place promotional assets and /or merchandising material in the field, e.g. display units, fridges, coolers, electronic displays, branded furniture or items, etc.? If so, how are they managed, tracked and recorded?
  20. What is your overall approach to trade tool kit management?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 13 ‘Trade Incentive Programme (TIPs)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Order to Cash, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence