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Route to Market & Supply Chain Blog

Trying to run an FMCG company without a Supply Chain department?

Posted by Dave Jordan on Mon, Jan 16, 2012

Ok, now back on line after the holidays and some demanding project work. One of the first catch-up meetings I have had this year was with an FMCG MD. No name of course, but this is a medium sized player with a broad European base and I have disguised the identity to protect both of us.

I recall how many companies plodded along with what we now accept as supply chain functions lost amongst other departments, e.g. buying and logistics in finance, planning with sales – I am so pleased that the latter is no longer the case! Many years passed before all these essential elements of supply chain were brought under one department. Looking back it hardly seemed like rocket science but it was a painful process as empires were dismantled and recognition given to what is still an undervalued function.

DisintegrationAlthough many were dragged kicking and screaming into the newly created function there is no doubt those companies operating an integrated supply chain have seen huge benefits over many years. Nothing happened overnight of course, as slowly but surely blue-chip companies made massive strides in cost, efficiency, service and innovation. Is it naïve to believe that supply chain is now considered equally important as say finance or those darlings in sales?

So, you could imagine my jaw dropping when I heard from Mr no-name MD that this company has taken the decision to dissolve the supply chain and relocate elements across the other departments. The SC Director role just vanished off the top table in one fell swoop. There must be a leading edge reason for this bold and brave (yes, insert “crazy” and “stupid” if you wish) move and I waited for the disclosure of the divine inspiration.

There was none. The insight behind the decision was that the company wanted more control over various areas of business and believed that a dispersion of roles would achieve this. The fact that segregation of roles is necessary for auditable control and accountability has been at best over-looked.

Why would you make such a decision? Answers on a post card please as this one beats me. I am not suggesting supply chain development has finished and we have the ultimate design (far from it) but reverting to an 80’s model in an effort to improve control seems to be a contradiction.


Image credit: Super hq Wallpapers

Tags: FMCG, Route to Market, Dave Jordan, CEO, Supply Chain, S&OP, Forecasting & Demand Planning, Logistics Management

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