How do we deliver sustained excellence in supply chain and route to market in the challenging markets in Africa?
I refer here to the entire supply chain from materials to shelf – i.e. supply chain and route to market (RtM).
Although many of the countries in Africa present unique challenges (we have worked in most), the principles of best practice in supply chain and RtM are generally the same as markets elsewhere; they do however, need to be considered within the context of your particular market.
If you have any doubts about your company, a good place to start is looking at organisation capability and the outcomes that an effective supply chain and RtM should deliver.
So here are 12 focus areas to consider:
- Customer service. Are your customers enjoying consistent and excellent service levels? Look at your OTIF KPI – it should be presented at every key commercial S&OP meeting.
- Planning Processes. Do your supply chain planning processes deliver optimum levels of service and cost? For costs, there will be a cost per unit metric, for example, and again this should be presented at every S&OP meeting.
- Inventory. Do you have full visibility of stock and are inventory levels at or below best practice industry standards? This is important for supply chain and RtM and a key metric. Watch out for days / weeks of cover for your Category A SKUs at key commercial meetings and S&OP.
- Logistics. Are your warehousing and transportation costs at or below industry best practice? Percentage of sales is one metric and should be measured quarterly.
- Route to Market. Is your distributive supply chain a source of competitive advantage? Look at Total Cost to Serve quarterly and monthly metrics including distribution coverage.
- Key Distributors. Are your Key Distributors performing to expectations? Do you have Joint Business Plans and Joint Action Plans with Key Distributors? Review this at least quarterly. On a monthly basis review the following – sales vs target, net and weighted distribution coverage in targeted channels, stock outs - focus on total days for Category A SKUs as close to the point of sale for which you have data.
- Measures & Performance. Do your KPIs quickly identify performance opportunities and guide corrective intervention? Think about the ones presented at your monthly commercial and S&OP meetings and the extent to which targeted actions are identified.
- Decision Making. Is decision making proactive and at the correct level in the organisation? Ask yourself this – Are operational managers (as opposed to the Top Team) driving decision making?
- Competency. Are your managers fully able to manage the demands of your supply chain and RtM? You will know this either objectively from your performance management process or instinctively by observing behaviour in meetings. The latter assumes that the bosses do not behave ‘too assertively’ (I am being careful with my choice of words) in meetings …
- Data. Do you operate your supply chain and RtM with one set of numbers? If you are presented with several spreadsheet in key meetings, be suspicious.
- Systems. Are your IT systems fully optimised to support your supply chain and RtM? Few are, so start from a position of scepticism and work your way up, so to speak.
- Cost. Are your total supply chain and RtM costs at or below best practice industry standards? Key cost metrics are Total Cost to Serve, unit cost per volume, direct costs (raw and packaging materials) / gross margin, total logistics costs.
If you have answered “yes” to all of the above, you have a fully functional, effective and efficient supply chain and route to market. Congratulations.
If you have answered “no” to any, there will be clues to begin the process of improvement and transformation. Good luck.
If you need any help on any supply chain issues, please reach out to me directly.