In the Four Frequent Flaws series we have looked at the entire supply chain right up to the consumer shelf, i.e. the Enchange 6-Part Model. What can go wrong, what can go right, what can I change quickly? FMCG CEOs are asking what they can do now rather than wait months or years for transformational projects top kick in and deliver.
The Frequent Flaws series features 28 different initiatives you can activate sooner rather than later. Perhaps you cannot achieve all 28 but focus on this selection of 7 and see the improvement in your supply chain.
Listen To Pareto.
Not all SKUs are created equal! Your business will probably rely on a relatively small number of SKUs (the 80/20 rule) so at time of stress stop worrying about an SKU that provides little benefit. Decide on your critical SKUs and then derive your equally critical RM/PM and deploy your available resources on ensuring the timely arrival of those materials.
Is your sales forecast honest? Is your full assortment offered for sale to all customers or do sales colleagues only sell what they know is available? An unconstrained demand forecast reflects what the customers may buy while ignoring any known or potential supply risks. If you only operate to a constrained demand signal you will never see your full sales potential.
Frankly, a crime! As a CEO is there anything more galling than signing a write-off proposal for hundreds of thousands of Euros? In addition to the loss of product you have also wasted storage and transport costs amongst others, plus the expense of physical destruction. Don’t wait for the year end to find out the value of your business waste, find out now. Identify every single waste stream and put actions in place to understand why it is being generated and actions to minimise recurrence. Zero waste is a tough ask but what if you were able to halve your annual cost of write-off?
Unless you are in the luxurious but unlikely situation of a single SKU production unit then changeovers will be inevitable. Every single changeover is a generator of waste in product, time and overall factory resources. A lackadaisical approach to changeovers is a reflection on the professionalism of the factory and must be avoided.
That overall cost of a changeover must be known and measured every single time. Teams motivated to shave off seconds, minutes or even hours will deliver immediate benefits both for the manufacturing unit and the business. If your staff slope off for a smoke or a coffee when a scheduled run is complete, you are in trouble.
Moving product from a factory to a warehouse will require a data exchange interface to be in place for 2-way communication. This is likely to be the first time the accuracy of your master data will be tested and if it is faulty, the warehouse management system will receive a headache paracetamol cannot cure.
If you do not have a competent person in charge of master data then appoint one now. Any variation in outer case configuration or pack size and even basics such as palletisation pattern will lead to errors in serving customers. If your business relies heavily on high levels of constantly changing promotional packs then the importance of accurate master data cannot be overstated.
Air is bad for you! Air may keep us going but it is the scourge of transportation. Moving half empty vans and trucks really is like emptying your wallet into a shredder. Inefficient, partial loads also tend to be unstable, leading to damages and customer returns so it is best to avoid for many reasons.
IT can help you optimise truck weight and volume but the human brain can come to the rescue. Take a physical look at how you are shipping your goods and challenge the department or 3PLP to optimise loads. From the producer perspective, can you help by increasing your pallet height/utilisation? Similarly, 3PLPs should not be reluctant to bring opportunities to the producers.
You’ve got to pack a pallet or 2.
Is there anything more heart-breaking for a logistician to open a truck and find carefully prepared products damaged and in disarray? Bottles smashed, liquids spilt, boxes crushed and very little is going to find its way on to shelves. Nobody in the Producer-Retailer-Consumer triad is happy and all are losing something.
If you are delivering well-constructed, shrink-wrapped pallet loads and the truck is full you are unlikely to suffer transit damage unless you let Richard Hammond drive. The problems arise when you pick & pack mixed pallet loads. Irregular and unstable collations which are not used to being together must be very carefully assembled and shrink wrapped. Resist the temptation to go even 1 layer higher as instability increases as is the risk of damage.
If you need to make FMCG supply chain change in the next 2-3 months, we are just a call away.
Feel free to use any of our contact routes including Live Chat, if you have any questions about how the simple 6-Part Model or the detailed approach of the Enchange Supply Chain House can assist your journey to supply chain excellence.
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