Supply Chain Blog

Demand a Culture of Route to Market Excellence Through Outstanding Leadership

Posted by Ross Marie on Tue, Mar 19, 2019

There are many things I have seen in over 20 years in the unbelievably exciting Fast-Moving Consumer Goods Business (FMCG). There are many things I can talk about and stories I can tell. But since I was first handed the keys to a van in 1998 to stock shelves in retail, right up until my most recent board presentation to the global CEO of a FTSE 100 FMCG company, one thing has always remained constant, Leadership drives Culture


culture-leadership-rtm-finalWhat FMCG Leaders say, what they do, how they do it, and how they live it, drives company culture. In other words, it drives what we do and how we do it around here. If we want to deliver real change and improvement in Route to Market (RtM) excellence, the senior management team, from the CEO down, must fully buy into and demonstrate that change.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. The 20 Steps are split into 4 phases, Assessment, Strategy, Design and Implementation. My goal in creating the 20 Steps, and in writing these supporting blogs, is to provide FMCG leaders with a methodology or framework that will allow them to review, transform or build their RtM capability is a structured manner, covering all elements of the RtM strategy.

Over the past number of months, we have gone through the first 19 steps of my model. The focus of this post is the final Step 20 – ‘Culture & Leadership’. When we review, transform or build RtM capability, the journey will not be linear. I say this because Step 20 will not be the last thing you do, but it will drive the entire process. For example, Step 1 Review RtM Performance, involves looking at all the current elements across your RtM, you might say it involves reviewing your existing 20 Steps, including Culture & Leadership.

Here are some examples of questions you can ask under Step 20 – Culture & Leadership:

  1. Before you start your RtM journey, what is the leadership platform that will drive success? Do we have the active support of the CEO, for example?
  2. To what extent are senior management at regional or global level supportive? Who will sponsor the changes that will be required? If we do not have senior management’s active support, to what extent will we be able to drive meaningful change?
  3. Based on the results of Step 19 Functional Integration, what are the functions and departments within the organisation that have been identified and mapped out as key elements of the RtM Strategy?
  4. Have these functions and departments been involved in the RtM strategy process thus far? For example, could we rank the department involvement from a level 10 (heavily involved) down to level zero (not yet engaged with)?
  5. Who are the key individual influencers within the organisation whose opinion carries weight across key departments or functions? Have these individuals been involved in the RtM process thus far? To what level has their involvement been?
  6. Who are the key external stakeholders, whether affected by the change or not, that need to be involved?
  7. Is there specific buy in or agreement that we need to get, in order to make and facilitate these changes? Will any of the changes have any political, legal or governmental consequences?
  8. What does our overall stakeholder map look like? Do we feel there are any gaps?
  9. What are the key messages that we need to deliver to the organisation? For example, why did we start this process? What was the need that drove the change? What changes have we made? Why did we make them?
  10. How will this new approach impact our employees, on their departments and on the company? How will this improve our current position? How will these improvements better equip us for the future?
  11. How will these changes help us to beat the competition? How will these changes better equip us to service our customers? How will these changes be seen by our other external stakeholders?
  12. How will these changes effect company departments traditionally not seen as sales or RtM focused? How do we engage and bring them along on our journey?
  13. How would we describe the current company culture? How do we do things around here?
  14. How big a cultural shift are we trying to make? Are we moving from an autocratic style of management where the “boss” tells people what to do, over to an empowerment centric culture where we want to see the RtM front line staff create and build new ideas? What does the size and nature of this shift mean?
  15. In what timescale are we looking to make these changes? Is this realistic?
  16. What are the essential behaviours we want to see in the organisation to make the new RtM approach successful?
  17. How do we ensure that we are getting the essential behaviours across the organisation to deliver on our RtM strategy?
  18. Does all of the company executive committee, management board, top team, management team, etc., understand the new RtM approach and the rational for change? In other words, has the Senior Management (CEO/Managing Director, and all direct reports) been brought through the entire process to ensure active advocacy?
  19. How will the Senior Management group show their support for the new RtM approach? Will there be a specific launch of the new approach? How will they be involved? What are follow up phases to this launch? How does the entire organisation see this advocacy and Leadership come to life?
  20. What is the overall change management plan to win the necessary stakeholder buy in to deliver RtM Excellence?

I would like to thank you very much for reading any or all of my blog series on the 20 Steps to Route to Market Excellence. I hope you find this useful, and any views and comments are most welcome. Although this is the final step in the framework, we will continue to discuss key RtM issues over the coming weeks and months.

Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: SKU, Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Communication, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Break Down Departmental Silos Through Functional Integration for Route to Market Success

Posted by Ross Marie on Fri, Feb 15, 2019

The FMCG business is like a team sport. There are sales people sent into the field, to sell more products and beat their targets. There are players put on the sports field, charged with scoring points and winning the game. In both scenarios, if the people behind the scenes don’t do their job, those on the front line can’t deliver. It’s that simple.

functional-integration-rtm

Route to Market (RtM) professionals need inventory to fulfill orders, budgets to execute Key Account agreements, Point of Sale (POS) material to help increase sales, devices to record information, take orders and communicate, vehicles to visit customers, etc. The RtM/Sales or TM&D (Trade Marketing & Distribution) function must have clear and open two-way communication with all the other business functions. Functional Integration is a cornerstone to any successful RtM strategy.

My first lesson in the need for Functional Integration came when I was a Sales Rep for an FMCG multinational in the late 1990’s. The Marketing Department was doing a big push for one specific brand. They sent every rep a large package of POS material with clear instructions to place it in retail. The main POS material was a cash mat. Cash mats are designed to be placed next to the till, on the counter between the retailer and the consumer, and are where the retailer can place notes and coins as part of the consumers change from their order. They protect the retailers counter, make it easier for the consumer to pick up their change and they can provide a great opportunity to communicate with the consumer at the actual point of purchase.

These particular cash mats were beautiful pieces of POS material. They were very high quality, the message they communicated was very clear and they were also very durable. But there was one big problem. They didn’t fit into the available space in the retail stores. There had been no interaction, consultation, or communication between the RtM function and the marketing function during their development. A lot of money could have been saved if there had been proper Functional Integration.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 18 steps of my model. The focus of this post is Step 19 – ‘Functional Integration’.

Here are some examples of questions you can ask under Step 19 – Functional Integration:

  1. Based on the RtM Review in Step 1, what are the other business functions that your RtM, Sales or TM&D department currently interacts with? Have you explicitly identified them?
  2. Are there currently ‘rules of engagement’ for the different interactions with the other functions, or has it just evolved?
  3. For each business function or department, to what extent have we identified the nature of the integration required? For example, what key processes are involved? What are the related process inputs and outputs? Have levels of inter-departmental performance been defined? Are these levels of performance explicit? If so, how has performance been defined? Do internal Service Level Agreements (SLAs) exist, for example?
  4. Based on the new RtM Strategy in Step 5, how will the functional interaction with the RtM department and other functions change? What new rules of engagement need to be established? How will this be measured?
  5. What is the nature of the integration with Supply Chain? How do we feed information into the Supply Chain Department? For example, who decides what the demand will be over the next few months? What are the implications for the Logistics Department? Has the RtM Department fed into these processes?
  6. Do we have an S&OP (Sales & Operational Planning) Process? Has the RtM Department fully bought into this process? Are we represented in it? Is it clear what information we should feed into this process? For example, what is the role of the RtM Department in the Demand Review Process?
  7. Who receives our information on Out of Stocks in the field? What actions are taken based on this? How do we prevent them? What help do we need to do this?
  8. Do we accept product returns from customers? If so, who manages this process and what departments interact with this?
  9. How does the RtM department interact with the Brand Marketing department? Has this process been formalised? How often do representatives from the marketing department attend trade field visits?
  10. Does the RtM Department feed into Point of Sale (POS) material development? If not, why not?
  11. Do we place any promotional trade assents in the field? Who manages this process? Who provides feedback on their applicability and usefulness? Who tracks and manages them as assets of the business? What is our process for this and which function is responsible?
  12. How does the RtM Department interact with the Finance Department? Who sets prices, margins, budgets and discounts within the RtM department? How does Finance fit in with this? How do we currently feed trade information into Finance? How will this change under any new RtM Strategy?
  13. How do we open new accounts with customers? Are any other departments involved? Who sets payments terms? Do we offer credit? Who then sets individual customer credit limits? How does the RtM department feed information into this?
  14. How do we collect payment from our customers? Is it all electronic? Do we accept any other forms of payment? Do we accept cash? What are the processes and procedures for this? Which departments are involved? Do we have a Security or Health & Safety Department or Function? Is this part of HR? How do we interact with them?
  15. How do we interact with the IT department? Do we have a CRM solution or hand-held device that is used to take orders and record market data? Who maintains this? Who feeds them information about its real-world application and actual issues?
  16. How does the RtM Department interact with the HR Department? For example, do we have a system for performance appraisals? Who is responsible for RtM Training & Development? Who manages performance appraisals? How do receive the company policies & procedures? How can or do we feedback on them?
  17. Who manages our company equipment, like cars, phones, tablets, laptops, uniforms, etc? How do we provide feedback on these? To whom?
  18. How does the RtM Department interact with the corporate/public affairs or PR department? For example, how often do they make trade visits? How do we feed information to them? How can they speak publicly or address key issues about our products or communications, without speaking to the department who deals with our customers?
  19. How open are we as a department? Do we have regular conferences and regular meetings? Do we invite other departments? Do we actively manage our relationship with other departments? Do we try to attend other departments key meetings?
  20. What is our plan to on board the other company functions to our new approach to RtM? Have we consulted them throughout the process to accelerate buy in? Have we looked at which specific areas within the 20 Steps to RtM Excellence will impact on which specific functions?
  21. What is the overall strategy to ensure the RtM Function is integrated with all necessary departments and functions across the organisation?

I hope you find this useful, and any views and comments are most welcome.

Next, I will cover the final step, Step 20 ‘Culture & Leadership’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, SKU, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, S&OP, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Inventory Management & Stock Control, Information, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Improve Your Key Account Management Approach with these Vital Tips for Route to Market Success

Posted by Ross Marie on Thu, Jan 31, 2019

Key Account Management (KAM) is how Route to Market (RtM) leaders effectively and efficiently manage the relationship with specific and strategic customers, or customer groupings, to deliver on RtM targets.

 

key-account-management-rtm-3-webCustomers are classified as Key Accounts based on a variety of reasons. For example, it could be because they have a large numbers of retail outlets all branded under the one name. It could be that they operate several bars and restaurants, that are of key importance for delivering your RtM Targets. Your wider organisation may also mandate that specific global customers are treated in a certain way. There could also be dozens of market specific reasons why you might assign a customer(s) as a Key Account.

Regardless of why a customer is assigned to KAM, the important issue is, how they are managed, how the relationship is nourished, how their growth plans are implemented and how they are serviced across our organisation. The central element to KAM is relationship.

Success in KAM Management requires careful consideration, especially if you are either new to the concept of KAM, or if you feel your organisation is not doing it right.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 16 steps of my model. The focus of this post is Step 17 ‘Key Account Management (KAM)’.

Here are some examples of questions you can ask when reviewing, developing or building your Key Account Management (KAM) department or approach:

  1. Based on the RtM Strategy chosen on Step 5 and the Channel Classification in Step 7, what is our desired approach to Key Account Management?
  2. On what basis do we determine that a customer falls into the KAM arena? Is this based on size, current performance, volume, uniformity, number of outlets, ownership of outlets, location of outlets, strategic importance, etc.?
  3. If the customer has a KAM classification in other markets that we or our parent company operate in, does that have a bearing on our local classification?
  4. Will we have different levels of KAM classification? For example, should we assign the label of ‘National Accounts’ to our larger national hypermarket retailers, who have a presence across our market? Or might we assign the label of ‘Key Accounts’ to some regional larger retailers who have multiple stores in one area of our market?
  5. Where does Channel Management fit into KAM? Will we classify our business or customers into Modern Trade and Traditional or General Trade? Will KAM sit into one or both of these channels?
  6. What proportion of our overall business is Key Accounts (as opposed to the Traditional or General Trade)? How to we expect this proportion to develop in the coming years? How will this shape our approach to KAM?
  7. Will there be a RtM manager who has overall responsibility for Key Accounts regardless of which Channel, Area or Region the Key Account is in?
  8. What might this RtM manager have responsibility for? For example, would they manage and be responsible for volume, display, product range, training, strategic approach, relationship, negotiation, reporting, targeting, budgets, etc.)?
  9. Based on our Competitor Analysis in Step 4, how does our competition view KAM? Are there any learnings for us in their approach, or does their approach change our own?
  10. Do we treat all Channels and/or Key Accounts in the same way? For example, will the distributors and cash and carry’s or wholesalers in one region of the country be managed differently than in another? Will this be reflected in the structure? Would the distributors in the North of country be managed by a Key Account Manager who reports to a RtM Manager with responsibility for the North?
  11. Are we clear about the types of individuals who will manage or become Key Account Managers? Do we have specific criteria? What is it? Have we properly weighted the importance of relationship building in looking at individuals?
  12. Where does Key Account Management sit in the organisation structure? What is the relationship between KAM and the RtM field force who potentially manage and call on the individual outlets? How is communication managed between the two? In practice, do they really talk to each other or limit themselves to mandated reporting and communication?
  13. Are we clear about the levels of importance of each channel or Key Account? Have we taken into account all RtM Targets, including strategic importance to us? Have we looked at this importance/power angle from the side of the customer? How important or necessary are we to them? How does this feed into negotiation?
  14. Do we have detailed Key Account Plans for each account? Does this clearly detail what our objectives and targets are for each account? Have we worked with the account in developing these? Have we worked with the internal stakeholders who will and can influence these? Do we simply want engagement with the account, or partnership, or preferred partnership, or exclusivity? Have we looked at previous years plans and taken learnings from them? Do we include what our individual account’s future plans or aspirations are?
  15. Do our Key Account Plans cover all areas of engagement between our two organisations, for example top to top meetings, Key Account reviews, wider RtM team interaction at customer level (e.g. retail or distributor), corporate entertainment/relationship building, order placement, deliveries, feedback on promotions, information sharing (e.g. sales/EPOS data), authority/empowerment, invoicing, seasonality factors, etc.?
  16. What is our approach to negotiating Key Account Agreements? When will they be negotiated? Who will be in the room from our side? Who has the authority to negotiate and to agree?
  17. What happens in the event of a stalemate or breakdown during Key Account agreement negotiation? What will the layers of escalation be? What is our approach to negotiation training?
  18. Do we have a full negotiation strategy per Key Account covering all elements of the agreement and estimated potential scenarios? Has this been agreed and signed off by all stakeholders?
  19. How are we currently rewarding or incentivising Key Accounts? What is the current reward mechanism, e.g. rebate, discount, payment etc.? Is it based on volume or revenue or profit or other RtM targets? What is the potential role of Third Degree Partnerships (3DPs) here?
  20. What role does margin play in our relationship with our Key Accounts? Do we have the control to set it? What are the internal and/or external factors that may affect our ability to set our pricing and margins?
  21. How do we manage and control Key Account investment? Who manages this? How do we determine levels of investment per Key Account?
  22. What payment terms do we operate across our RtM? How do payment terms fit into KAM? Do we have specific payment term targets, by account, by region, by channel, by customer? Do we have the mechanisms in place to facilitate the different forms of electronic payment? Do we have minimum acceptable payment standards? What is our overall approach to payment terms in relation to KAM?
  23. Which of our Channels and Key Accounts are growing? Which are declining? How is this reflected in our overall strategic and individual approach to KAM?
  24. How do we capture learnings across KAM? Do we have a process for capturing success in one account and replicating it in another?
  25. What is our overall approach to KAM? What is our implementation plan for rolling this out?

I hope you find this useful, and any views and comments are most welcome.

Next, I will cover Step 18 ‘Training & Upgrading’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, SKU, Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, S&OP, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Compliance, Information, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Form Lasting Alliances with Key FMCG Customers at Almost Zero Cost, How? - Third Degree Partnerships (3DPs)

Posted by Ross Marie on Mon, Jan 28, 2019

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the detail of the first 15 steps of my model. The focus of this post is Step 16 ‘Third Degree Partnerships (3DPs)’.

Step 16 represents a different concept and approach to motivating your customers to want to deliver on your targets. I hope it is helpful, and I welcome any feedback. So, what are Third Degree Partnerships (3DPs)?

incentives for fmcg customers with third degree partnerships in rtm

Third Degree Partnerships (3DPs) are where a Fast-Moving Consumer Goods (FMCG) company identifies its customers key issues, costs or constraints, and then forms a partnership with a service provider who can solve them for the customer, at a significantly reduced cost.

The benefit for the customer is access to cheaper services. The benefit for the service provider is access to more customers. The benefit for the FMCG company is the ability to use the provision of a 3DP service as if it was a trading term or key account payment to the customer, with almost zero cost.

In short, we identify our customers key issues, we then identify a service provider who can solve them, and we use our size and clout (maybe even our global reach?) to negotiate a much-improved price or access to the service for our customers. We then decide what we want in return for providing our customers with access to this 3DP club.

What would we want in return? Examples include, product listings, exclusivity of some form, increased product range, pricing or other promotions, improved display, minimum volume targets, brand dialogue, use of a new distributor, access to a territory, etc.

Why would you use 3DPs instead of a cash payment or discount? Several potential reasons. For example, maybe you have significant pressure on Route to Market (RtM) budgets and need to spend less in the key account or customer payments area. Maybe you need access to a new strategic channel and the costs of entry would eliminate profitability. Maybe you are facing pressure and need to boost sales but have no budget for promotions. Maybe you are facing significant competition and need a fresh approach to work with certain customers.

Think of 3DPs as a type of rewards club for our customers. They may require time to set up but have little associated cost for us as FMCG leaders, provided we do the ground work.

Here are some examples of questions you can ask under Step 16 ‘Third Degree Partnerships (3DPs)’:

  1. Based on the Channel Classification in Step 7, what are the different segments of customers in our market?
  2. Looking at each customer segment, which are the most appropriate or suitable for 3DPs? Where will 3DPs have the most potential value or be the most valued?
  3. Would there be a greater applicability in the less organised General Trade versus the more organised Modern Trade, for example?
  4. Do we feel providing our Horeca owners with access to reduced cost services will be as beneficial as providing reduced cost services to international retailers?
  5. Could the customers in question get access to these reduced cost services themselves? If so, why have they not done so? Is there still a value in these services?
  6. Is there any specific channel in which we are under-performing? What are the reasons for this? What are the defining characteristics of the channel? Could a 3DP help us here?
  7. Have we included and looked at the specific geographic issues, challenges and nuances within our specific market, to map out our local customers’ challenges? For example, the islands of Indonesia, the congestion in Bangkok, the vast geography of African countries, the severe temperatures in Russia, to name a few?
  8. Considering each customer segment, what are the customers’ key issues, costs or constraints? In other words, what are the problems our customers are facing for which we could provide solutions?
  9. Looking at each of these key issues, costs or constraints, can we identify service providers who can solve these?
  10. Are these potential service providers local to the market? Is there a potential for us to bring in external suppliers to the market? Would we want to do that? Does that create more issues for us in setting up the 3DP or does it make the 3DP more powerful?
  11. Can bringing in external service providers as part of a 3DP create barriers to entry for our competition and barriers to exit from the 3DP for our customers?
  12. Are there particular services that we, as an FMCG company, benefit from, that we can in turn provide to our customers through 3DPs? Can we use our size and scale to negotiate a package or price and offer access to our customers in return for something?
  13. What services might we offer as a 3DP? For more inspiration, download our Implementing Third Degree Partnerships (3DPs) in Route to Market Guide here.
  14. Have we prioritised the potential services that we may offer as part of our 3DPs? Have we ensured that the 3DP programme will not reduce focus from achieving our RtM targets but instead assist with them?
  15. Have we looked at why we would use a 3DP instead of another incentive? Have we detailed what we would ask for in return for access to a 3DP?
  16. How will the 3DP programme be managed? Will key accounts manage the programme? Will we require additional resources in the RtM function to do this? Must this be done on a national level or will we allow regional implementation?
  17. Have we involved our legal colleagues in the contracting process to make sure there is no exposure for us from the services provided by the service provider(s)?
  18. Have we conducted a risk assessment to look at any specific local or other issues that may affect the 3DP programme?
  19. Taking all the above into account, what would the overall 3DP programme look like?

I hope you find this useful, and as I said, views and comments are most welcome.

Next, I will cover Step 17 ‘Key Account Management (KAM)’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

 

3rd degree partnership download

 

Tags: Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Doing Business in Africa, Communication, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

How to Master Technology in Route to Market Strategy to Save Resources and Fuel Sales

Posted by Ross Marie on Fri, Jan 11, 2019

When we discuss Technology in terms of Route to Market (RtM) Strategy we are looking at our overall approach to and use of Technology at every stage of our RtM Strategy and Execution.

rtm-technology-webThis includes, for example, the hand-held system we take orders on, the ERP system the company uses, the tracking method we have for targeting the RtM team, the way we measure and track our key account agreements, how we optimise our route planning, and everything else across the RtM space.

The key in many cases will be minimising the number of systems we use, facilitating their integration, ensuring their simplicity and allowing them to minimise human intervention.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 13 steps of my model. The purpose of my blog series is to stimulate your thought processes around RtM, and to allow a moment to think and to ask some key questions. The focus of this post is Step 14 ‘Technology’.

Here are some examples of questions you can ask under Step 14 ‘Technology’:

  1. Based on the RtM Review in Step 1, what is our current approach to and use of Technology across our Route to Market?
  2. What is the Systems Landscape operating across our RtM function? To what extent are the systems integrated?
  3. Do we use an ERP system? Is this linked to any other RtM systems? How does this integration work? Have we adopted systems that are no longer fit for purpose?
  4. Do we get distributor, customer or third-party sales data? If so, what do we do with this? Is this fed into our own RtM system? Can we measure and report on this? What manual intervention is involved?
  5. What is our use of spreadsheets across the RtM function, including strategy, execution, monitoring and reporting? How many different departments are using them? Have we looked at this aspect in the past and what view did we take at the time? To what extent are we managing the risks associated with spreadsheet usage?
  6. What is the current order capture method? Do we use a CRM? Do we use a hand held, tablet or phone? If so, what is their current ease of use and performance? How integrated is the order capture method into the overall company system(s)?
  7. What systems for we use to monitor the performance of our RtM representatives? For example, do we know how many calls they are doing per day, what their location is at any given time, what their stock levels are, etc.?
  8. Do we track our distribution and RtM vehicles electronically? If so, what do we do with the data?
  9. Do we have a solution for setting and monitoring our RtM targets? Is this automated and integrated into our overall RtM system?
  10. How do we measure product display across our retail, Horeca and customer network? Is there a technology solution for this?
  11. How do we track, monitor and report on compliance to customer agreements, whether they are national trading terms with key accounts, of single store contracts?
  12. Do we have any connectivity constraints in our marketplace? Does our RtM team have access to mobile/cellular data across the country or does connectivity wait until the end of the day? How does this impact on our approach to Technology?
  13. Do we use RtM data analytics across our RtM? If so, what do we do with the data? If not, have we looked at this in the past? What are our next steps for RtM data analytics?
  14. Do we have a solution for capturing cost to serve data across the RtM? Is this a simple automated process or does it require manual intervention? If so why? What are we doing with this information?
  15. To what extent do we use technology to set up sales territories and look at route planning? If not, why not? If we do use Technology here, what have the results been?
  16. What is the current amount of time our RtM team spends using technology? Is this what we want and expect? Is this the best use of the RtM team’s time or have we over complicated any process?
  17. Do we use social media and other form of digital marketing for RtM? Does it form an integrated part of our RtM strategy or has it been deployed in silo from other RtM initiatives? What have we used it for and what have the results been? Who in the organisation uses social media for RtM? Do we have a clear strategy and guidelines in place for the use of digital tools?
  18. Do we train our RtM team on all aspects of Technology that we use in RtM strategy and execution? Is it very clear which aspects of Technology are ‘in scope’ and ‘out of scope’ for certain roles/departments?
  19. Does our RtM team currently employ workarounds due to current system set up?
  20. What are the current technology gaps in our RtM? Where are the manual processes that need to be automated? On the other hand, are their examples where we are over complicating an area or issue for the sake of technology?
  21. Given all the above, what is our overall Technology plan across the RtM, Sales and/or Trade Marketing and Distribution function?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 15 ‘Distributor Partnership Programme’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: SKU, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Cost Reduction, Sales, Distribution, RTM Assessment Tool, Information, Retail, RTM, Promotions, ERP, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Improve Manufacturing Performance with Total Productive Maintenance

Posted by Dave Jordan on Thu, Aug 23, 2018

When I first came across Total Productive Maintenance (TPM) I was sceptical of yet another ”blue sky” approach to pursuing manufacturing excellence. Surely, this would soon be replaced by the next set of buzz-word initials dreamed up by sharp-suited consultants. But no; I saw the light and now I’m a firm believer in this technique that originated in Japan.

If you have a factory that is running below par in terms of efficiency, output, reliability or cost etc, then TPM could be the ideal tool to achieve a sustainable turnaround. Companies do not like under-performing factories and there is usually somewhere else they could make their products better, faster or cheaper. So, if your factory is under threat of closure you might consider following the TPM principles.

TPM is not rocket science but it requires just as much senior management buy-in and patience as an S&OP process demands. There are multiples levels of TPM success but even the basics will require a significant and sustainable change in behaviour. Kick off with the Kaizen 5S approach which is remarkably simple stuff.

Total Productive MaintenanceKaizen 5S is based on the translation of 5 Japanese words relating to systematic improvement and maintenance of a clean, efficient, well organised operation.

  1. Sort – Sort out what you really need – I mean really need! Throw out anything that has been hanging around for a few years “just in case”. Check out your spare parts store and see what items are held for equipment you no longer own!
  2. Straighten – Have you ever mislaid your car keys? This system creates a dedicated space for every tool or spare part located near to where it is needed and you can clearly see when it is missing!
  3. Scrub – Clean the machines and the production area thoroughly. Dust can affect quality, spills can be hazardous and well maintained equipment lasts longer.
  4. Standardise - If you use identical working practices for maintenance and cleaning your employees will become highly proficient. Standardisation provides you with a flexible workforce that can be deployed where needed and without a training period.
  5. Sustain – From the factory manager to the tea boy you must keep the faith and sustain every initiative. This is very difficult at first but you have to grit your teeth and keep going.

Of course, this is merely a snap-shot of what TPM entails but it shows you the basic elements you need to start the journey. As mentioned, the first tentative steps can be painful but if you stay the course the benefits are immense in efficiency and employee satisfaction. The principles apply equally to logistic centres, offices; essentially everywhere people work.

Oh, but don’t try this at home or a divorce is highly probable, believe me!

Image credit: corbindavenport.blogspot.co.uk

Tags: FMCG, Dave Jordan, Performance Improvement, Manufacturing Footprint, Supply Chain, Cost Reduction

10 Top Tips to Successful Mergers & Acquisitions (M&A) Integration

Posted by Dave Jordan on Wed, Aug 15, 2018

The ink is dry on the deal, the celebratory corks have been popped and the sharp-suited lawyers have gone off to bank a small fortune. The projected negotiations to thrash out a deal to buy or merge with another company are finally over. Relief all around, smiley faces, back slapping; cigars; done and dusted! Although through-the-night negotiations on a diet of poor coffee and poorer cigarettes are not easy, integrating the two or more entities will be substantially harder and a potential minefield.

M&AsConsiderable time, effort and cash are expended in calculating the business case of M&A activity before completion of a deal. Elaborately crafted press releases tell the world about the benefits the new relationship will deliver. However, very few people involved up to this stage in the process will actually be accountable for future success or more likely, failure.

Whether your M&A is a local, regional, national or global event here are 10 top tips to getting as close to the glossy press release promises as possible.

  1. Team. Appoint a team to lead the change and ensure there is a Change Manager in the team with deep and recent experience in the field. The overall project must be led by someone of suitable seniority in order to make an easily accessible two-way bridge between junior and senior groups. Don’t select the team members from one entity only!
  2. Objectives. Make your intentions and targets clear and get buy-in from all parties and particularly the acquired team. If you genuinely make everyone feel part of the process you will have greater success in implementing difficult decisions later on and for sure these will come!
  3. Assets. If offices and factories are involved and your intention is to centralise/ harmonise you need to approach this delicately. The “bought company” will always assume their workplace is most at risk so all evaluations have to be transparent and honest and impartial 3rd party expert help is advised.
  4. Culture.  There will inevitably be differences in company culture but if both sides can accommodate modification towards a new halfway-house then that can be a win-win but it is extremely difficult to achieve. If culture is forced on one group or another then you are likely to fail.
  5. Rumour Control. Have you ever heard a good news rumour about someone? Most rumours are negative or critical or someone or something and they will plague M&A integrations. If you get your communication policy in order and people feel free to raise concerns then damaging coffee machine whispering can be nipped in the bud.        
  6. Communicate, communicate, oh and communicate. M&A integration worries people and worried people are not as efficient and diligent as they should. Invest in a website and/or newsletter that very clearly keeps people informed on progress and next steps. Keep them fully involved with Q&A sessions and proactively sought feedback.
  7. Keep the business going! Sounds obvious but getting distracted by integration ups and downs can severely damage your business. You must keep close control on maintaining good practice in all integrating businesses.
  8. Complexity Reduction. If the businesses have similar SKU ranges then take the opportunity to understand where there are clear overlaps and where an SKU cull can free up human and cash resources.
  9. Constantly review. Integration is a real moving feast! Assumptions will change and plans may have to be modified and these should be embraced rather than receive critical attention. Do not be afraid to revisit the objectives and plans frequently and modify as prudent.
  10. Celebrate. When significant milestones are achieved be sure to get the cakes and champers out. Reassure people that the journey is progressing well and particularity those not directly involved in the process as they will feel the most pressure on job security.

When you consider the amount of time and money that went into securing the M&A deal a generous budget for integration will pay back extremely quickly. A degree of early planning and preparation on the actual integration will see you reach the press release objectives – if anyone ever checks!

 

Tags: FMCG, Mergers & Acquisitions, Dave Jordan, CEO, CEE, Cost Reduction

FMCG cost savings versus sales & marketing budgets!

Posted by Dave Jordan on Mon, Aug 13, 2018

There is your dilemma. You need to save cash towards an expensive year-end holiday but you really do not know the best place from where to take the money. Do you take it from your day to day current account which is already set up to pay the routine monthly bills and invoices? Do you take funds out of an investment account that has not yet actually matured?

In effect, the money in the current account is already committed and the expected appreciation in the investment account is still to be delivered which puts me on my soap box for today’s topic.

When times are tough and cost savings are required why do the senior bods always look to Supply Chain in the first instance? Unlike those colleagues with a fondness for endless agency lunches there is very little discretionary spend to be found in the vast majority of Supply Chain operations. OK, there may be some team building budget, business travel and a small entertainment allowance but where else can you save money?

There is not a lot you can do to have an impact in the short term. What could you do?

1. Negotiate better RM/PM prices? Yes, but this will not filter through to the bottom line very quickly.

2. Increase efficiency in your factories? Yes, but again not likely to hit the balance sheet any time soon.

3. Reduce head count along the Supply Chain? Certainly effective but think about notice periods and compensation obligations and not least the effect on efficiency and reliability.

FMCG Pharma cost savings supply chain resized 600You will have contracts in place for most services with 3 or 4PLPs for warehousing but as long as pallet space utlisation, storage efficiency and shrinkage etc is under control there really are few opportunities and certainly no “low hanging fruit”.

People often rant on about how sales and marketing people are the real stars of any FMCG or Pharma show and without them nothing happens. Think about it, if you do not have any product available to sell it does not matter if you have the best sales pitch or the most memorable TV advert, does it? In simple terms the SC gets the stuff there and S&M might, repeat might, sell it!

Supply Chain people and processes get the product into Traditional Trade and Key Account outlets and how they do it is relatively inflexible in terms of discretionary spend along the way. So when you are looking for savings why do you assume they must come from Supply Chain and not from the huge sales and marketing budgets? The promised client discounts have not yet delivered and the proposed new TV advert is a long way from having an in-market impact.

Certainly, you have to keep control of costs and a rolling annual target is a sensible plan for any business but 2-3% Supply Chain reduction every year is commonly small beer compared with multi-million S&M expenses. Diverting your valuable Supply Chain resources to scrimp and save these small percentages simply takes people off the day to day priority of getting your SKUs onto shelves.

Those Supply Chain “savings” may not actually be money in the bank.

Image courtesy of cooldesign at freedigitalphotos.net

Tags: FMCG, Dave Jordan, CEO, Pharma, Supply Chain, Traditional Trade, Cost Reduction

FMCG & Pharma: Top 10 Tips for a Tip Top Supply Chain

Posted by Dave Jordan on Mon, Jul 16, 2018

Only a few months into the year and I am hearing the same old complaints about the economy and business being in general ill health. However, there is a new recurring theme which popped up at various parties and gatherings over Easter; “my company doesn't seem to do anything different and just hopes business will improve”. Not going to happen, no way!

FMCG_PHARMA_SUPPLY_CHAIN_TIPSCertainly learning by your mistakes is a powerful message but banging your head against a brick wall for a number years is a rather pointless and painful experience and reflects dire leadership. Those companies that identify failings and shortcomings in their supply chain AND do something about them will be best prepared to beat the competition.

Based on client feedback and impact analysis of “before and after” performance I list our top 10 tips to tip top Supply Chain performance. 

  1. Route To Market – Has the march of the International Key Accounts stalled? Traditional Trade Distributors may still be a large chunk of your business and they are capable of scratching out growth but only if you support them. Give your RTM a thorough service and your Distributors will serve you better.
  2. Sales & Operational Planning - If this is in place and working well, great but there is no doubt you could improve it. If there is no S&OP you should use it! If you are not yet a believer of S&OP check out “What has S&OP ever done for us?".
  3. Reduced Inventory – Why not give your sales a boost with some unexpected and low cost support using stock that will be otherwise written off? I detect numerous companies “encouraged” stock into the trade for year end and only the residual stock disposal companies will benefit if stock gets too close to expiry.
  4. SKU Complexity – When did you last study your complexity? Do you have any idea what complexity is doing to your business? Understand your sku complexity and check if it appropriate for your business.
  5. Improved Customer Service – A number of major global companies still do not measure CS to any degree of accuracy or honesty.  Companies that fool themselves on Customer Service rarely succeed.
  6. Proactive 3PLP’s – Are they meeting the agreed KPI’s? If they are then perhaps you need to review them and revise targets upwards, again and again.
  7. Sales & Marketing Buy-in – This is still a problem, I fear. If only everyone in your company was aligned to the same volume/value plan and 100% mutually supportive. Think what sort of competitive edge that would provide.
  8. Use the ERP - Avoid uncontrolled spreadsheets like the plague! They undermine your business and waste time and effort. If you are considering a fresh implementation of an ERP then chose a partner with experience in the field. I mean real operational experience and not bought-in fresh out of university, suited “experts”.
  9. Continuously Improve – If you are in the same position in 12 months time then you will be dropping towards the back of the pack and will be ill equipped to compete. Keep innovating and improving your Supply Chain.
  10. Supply Chain Awareness – A very important tip top number 10. There is more to supply chain than trucks and sheds - for the uninitiated this is what Supply Chain is all about.

Check out the top 5 as a priority and then seek an expert partner to lead you through the process of change in the next 5. Don’t be in the same position this time next year; do something!

Image courtesy of Stuart Miles at freedigitalphotos.net

Tags: FMCG, Route to Market, Logistics Service Provider, Dave Jordan, CEO, Performance Improvement, Pharma, KPI, Traditional Trade, S&OP, Cost Reduction

FMCG Cost Control: Boosting Brewing Bottom Lines

Posted by Dave Jordan on Tue, Sep 19, 2017

Picture the scene in many a brewing boardroom; a terse note has arrived from the suits at HQ telling the boss to urgently reduce costs as the year-end result is not going to look pretty. Why do all the board directors then look silently at their supply chain colleague? Of course, there are significant costs associated with a modern supply chain but you cannot make significant savings from that infrastructure overnight.  Supply chain budgets very rarely contain significant discretionary spend unlike the bank busting sums in the pockets of sales and marketing!

BREWING_COST_SAVINGS_BOTTOM_LINE_FMCG.jpgAs is usually the case, let us assume the SC team is constantly looking at ways to reduce cost in factories, logistics networks, 3PLPs, planning etc. What other costs could be challenged without causing discontinuity and unnecessary stress in the company?  The SC usually leads any cost efficiency projects which I think is fair enough as the discipline is most familiar with cost control and challenge.

Here are 5 areas I feel are always worthy of visiting when looking for "low-hanging fruit" bottom line benefits.   

  1. Old promotions, soon to expire stock, old artwork/label stock, slow movers. All companies (particularly FMCG) will have some or all of this and for various reasons - some good, some not so good. If you do not routinely address this you will be hit with an unexpected loss at year end or at the next stock count. Bring the list to the board meeting and hold accountable the actual people responsible for creating the stock in the first place. Sell it out and stop paying for storage too!
  2. Promotional activity. Is it all really necessary and does it actually pay back? Do you know how much of that original pristine packaging assembled in the factory is destroyed in the name of the latest promotional whim? Plastic film, outer cases and trays litter the floors of repacking operations everywhere. You have paid for that original packaging and now you are paying someone to destroy that and replace it with fresh material. Just think of all those Dollars/Euros that could be spent in a much more customer focussed way or simply saved? When you consider all the extra labour, logistics and packaging material just how much value is really generated for your business?

  3. How many SKUs do you need? Do you know how many your business has when you include all the promos and specials? Every single SKU costs money to source, transport, plan, store and deliver. Plus, the more you have the more likely you will generate the problem discussed in point 1 above. Analyse your current portfolio and see what is really driving value in your company. Conversely, see what is sucking value out of the business at the other end of the scale. Every extra low value SKU clogs up the wheels of your Sales & Operational Planning (S&OP) process.

  4. Telephones and internet. Always a difficult area as it can be perceived to be petty but it is usually an uncontrolled drain on cash. If you have provided staff with internet access on laptops or tablets or telephones you can be sure you are funding personal surfing time. Unless free telephone calls are part of the remuneration package why should the employee not pay for them? In my experience, significant cash can be saved through just a little prudence in this area. Do you leave your telephone network open at night with unlimited international dialling access? Also, the next time you see 2 people in the same office talking to each other on company mobile phones.......

  5. Discretionary spend. Don't make it discretionary! If budgets exist for team building and entertainment you can bet your life those funds will be used. Do you really need to "team build" every year? These occasions tend to be considered as a perk of the job and I am not convinced of their value when they happen so often. If team building sessions are to go then you should ensure this applies to all departments. Letting the marketing team building slip through will simply demotivate the rest of the company.

Achieving visible buy-in at the top table which is cascaded to teams will generate the best initiatives and ensure alignment. Paying consistent attention to these and other cost areas might save you from the ultimate saving of issuing redundancy notices including possibly, your own!

Image courtesy of Pixomar at freedigitalphotos.net

Tags: Brewing & Beverages, FMCG, Dave Jordan, Forecasting & Demand Planning, Cost Reduction