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Route to Market & Supply Chain Blog

Time to Spring Clean your Supply Chain in Brewing, Pharma & FMCG

Posted by Dave Jordan on Mon, Feb 14, 2011

Is the market getting any better, really? Many big name companies have announced indifferent full year 2010 results recently and all caution about the continuing “difficult market conditions”. Ok, so 2010 has been put to bed but many will be paying the price for the mammoth last quarter efforts which must have made the advertising and promotional agencies extremely rich. I wonder what a snap-shot of bottom line profitability looked like over the final 3 months of 2010?

If the economy is not much better than last year what exactly can you do differently to keep ahead of your competitors in 2011?  If you had all the time in the world you could apply all of the Top 10 New Year Supply Chain Resolutions. You might not have the time and resources to tackle all of them but there are a couple you can take advantage of for some quick wins. Give your Supply Chain a much needed “twin pack” of a Spring Clean and see the difference this can make.

Most businesses will have carried out a stock count at year end. You do count your stock don’t you? If you don’t then I guarantee you will have less than you thought! You should now have a clear list of those items which are clearly overstocked, close to expiry, old label etc. Every day you keep hold of this stock is wasted as the expense slowly but surely chips away at your bottom line making your life unnecessarily difficult. Get rid of it! Give it to charity. You could even sell it! If you clear out your stocks you will naturally create a slightly more responsive and faster Supply Chain.

Reduction of SKUs resized 600Do you know how many “must have” core and promotional skus you added in 2010 in order to get as close to HQ targets as possible? In difficult times it is easy for processes and procedures to be overlooked in the search for more sales. Every sku costs you money even if it is difficult to quantify in your business. Do all of the skus actually contribute to profit? If you do not monitor profitability by sku then a considerable proportion may exist for no benefit. You need to be dispassionate about culling skus that are not performing. As far as possible you should keep Sales and Marketing out of that decision making process until your business case is water-tight.

Each of these initiatives is relatively straightforward and certainly not resource intensive. Carrying out this simple Spring Clean and getting your house in good order will help you focus your efforts on winning in the market place.

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

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