People who work in fast food outlets – I really cannot bring myself to label them as restaurants – must have specific training in dealing with non-standard orders. Can you imagine the temptation to audibly groan when in a crowded outlet someone asks for a Muck Chicken Burger but without the usual mayo, salad and gherkiny stuff? (Does anyone actually eat that?)
Or, worse still, the gluten-free guy at the front of a mile-long drive-in queue asks for a Big Muck Burger but without the bread bun – I have seen this frequently. Quite why you would want a burger without the bun (GF or otherwise) I have no idea but it is on the order so on both occasions the well-trained staff stifle a groan internally and then advise that this will take a few extra minutes.
The groan ripple effect reaches the food preparation area where a special non-standard ticket is picked up and acted upon by a 4* chef. Instead of continuing the slick production line rolling out the fast-moving standard menu items, someone has to specially cook and prepare something that is not on the menu. The burger-less bun is probably relatively easy to serve unless the customer is a coeliac where even a trace of wheat will result in an urgent bathroom search.
Would they dare to simply wipe the mayo and associated gherkiny goo off a standard burger? I bet they are tempted but I doubt they would do this, so a 'special pack' has to be made and this is then sent towards the front counter with different wrapping or an indicative flag on a cocktail stick. There are so many potential menu variations that it would be impossible to 'make to stock' so in this case 'make to order' is the only system possible, however much complexity, time and extra cost is incurred.
In FMCG there is a similar logic in terms of SKU availability albeit with far more menu or sales list items than the local fast-food outlet. Those SKUs that sell frequently and in large volumes generating high margin should always be available. Going out of stock (OOS) of an 'A' SKU is unforgiveable - I mean real OOS on shelves where sales are actually lost and not just delayed network replenishment. Where possible, such 'A' SKUs should be produced frequently e.g., weekly or even daily depending on the sector, geography and DRP network.
At the other end of the scale, those 'D' SKUs which are slow moving and generate little or even negative profit, can afford to go out of stock at times as they are relatively unimportant to results. If they are absorbing some fixed cost element then OK, they have a role but they will not make or break your in-market performance. Where space exists either at production units or more likely in downstream DRP networks, you should produce and store higher stocks of these SKUs reserving factory flexibility for more profitable output.
Of course, this may lead to a higher stock holding value than you and SC Finance might desire but it is right for faster moving Customer Service. If your current stock policy calls for the same blanket cover for all SKUs then you might consider a growth promoting review and focussed adjustment. This really is not that hard!
SKU Stealth
If you are not vigilant, Special Packs can rapidly become standard SKUs on the price list. If you are producing the same item every month/week/day under the banner of 'special' then it's not really special, is it? Every single Special Pack MUST be challenged through the S&OP/S&OE processes. Regular appearance in the plans should see the SKU become a standard SKU with the deletion of at least 1 existing SKU to compensate.
Have a nice day!
If you have any Supply Chain or Route to Market problems or opportunities you would like to discuss - like too many SKUs - then please reach out to Enchange.com via telephone, email, or live chat.