I met the CEO of an FMCG drinks company at a recent charity event and with both being fans of the foaming ale we settled on a post main course discussion of all things beer. At this event I was not wearing my Enchange hat so the conversation was very open and informative in a way that formal, office based meetings seldom allow.
We talked about readiness for the upcoming annual appearance of the World’s Greatest Drinks Salesman. Obviously, I was not in UK as they have already enjoyed their summer day this year. All was good apparently and they were anticipating a good season supported by several new variants and an aggressive marketing campaign.
In fact, said Mr. CEO slowly topping up on his own product, “if we can get beyond 80% Customer Service level we could be in for a great year”. The background music stopped playing. Drinks were suspended in long streams from the necks of bottles above thirsty glasses. People around the room were in a state of frozen animation with faces fixed in laugher and limbs in mid stride or dance. A silence enveloped the room as a cloud of mist was silently sucked under my table.
Immediately, sensing the urgency I reached under the table to find the blue coloured, round cardboard box tied with ribbon. I pulled on the ribbon and reached inside the box for the contents. As I put my Enchange hat on everything in the room immediately returned to normal. Drinks flowed and splashed into glasses, laughing continued and the dancing-dads resumed their jerky exhibitionism.
I repeated what I had just heard in case it was the beer talking/listening but no, their Customer Service Level across the hot seasonal peak was a relatively paltry 80%. What is more, I knew that this level was significantly lower than competitors in the same markets.
Next step was to start throwing in a few searching questions that would tease out the reality in this business:
1. Is forecast accuracy measured? Is the measurement "honest" and allows you to monitor improvement?
2. Does your Supply Review use a clearly agreed plan of expected sales?
3. Is there a single set of financial numbers used by all functions?
4. Do you lead an S&OP meeting each month which covers an adequate planning horizon?
5. Are all orders are given a clear promise date at order capture and service levels given the highest priority?
6. Is there a process to provide visibility for key items covering an adequate planning horizon while maintaining materials at an optimum level?
7. Is there a series of formal meetings in place to support S&OP?
8. Are you seen to be actively leading S&OP across the business?
9. Do you have suitable IT tools, systems and KPI performance measures to support S&OP?
10. Do you believe S&OP works for you?
Mr. CEO was popping out so many “no’s to these questions he sounded like he was being mercilessly tickled by Ken Dodd’s tickling stick.
As the coffee and cigars arrived I decided to literally bite a biscuit and then told him he was running an immature S&OP rather than a having a fluid process that should be running the business. Do nothing and 80% Customer Service will be all you deserve and can expect. No cigar moment for this CEO,yet……..
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