Route to Market & Supply Chain Blog

How Can We Increase Trade Coverage Through Our Distributors in Africa?

Posted by Ross Marie on Mon, Oct 14, 2019

This is a challenging question and one that we need to break down. Trade coverage, brand distribution, distribution coverage, brand or SKU (Stock Keeping Unit) availability, or whatever terminology you use, is one of the most important Route to Market (RtM), trade marketing and/or sales operations metrics out there. In this blog, I will use the term trade coverage.

Increase Trade Coverage in AfricaSo, what do we mean by trade coverage? This refers to the presence of our brands and SKUs in the total number of outlets across the country or geography in question. It is about our reach into retail Points of Sale (POS). Depending on our industry this can include every POS from the large modern trade hypermarket or supermarket in a city, to the smallest HORECA (Hotels Restaurants Cafes) open window in a tiny rural village, often referred to as Traditional Trade.

The metric can also be weighted or non-weighted. Non-weighted simply looks at the total number of POS vs those that you are present in. The weighted version considers the volume of the outlets. For example, if there are 100,000 POS in the country, and we are present and available in 80,000 of them, we can say that we have 80% numeric or non-weighted trade coverage. But weighted trade coverage becomes very important, as the 20% of outlets we are not present in could all be large city high volume outlets. In this case our weighted trade coverage would be well below 80%.

In looking at increasing our trade coverage through our distributors in Africa, what information do we need to gather or what are the key questions we need to ask?

  1. Do we know how many outlets there are across the country? Does this cover all channels, territories, zones, regions, etc.?
  2. When was the last time we conducted an EDS (Every Dealer Survey) or a trade census to determine this? If we don’t have this facility, what measurement do we use? Has the survey covered all outlets, or do we need to consider other ways of identifying our retail universe?
  3. Is the entire country serviced by distributors or are there wholesalers or Cash & Carry’s also?
  4. What information and data do we get back from our distributors? Do we have agreements with them that ask for specific information or sales data per outlet? Is this level of sophistication even possible? To what extent is this data desirable for us (it nearly always is)?
  5. Do we have a distributive map of the country showing which distributors cover which outlets? Have the distributors been assigned territories or zones?
  6. Are there different levels of distributor, tier 1 or 2 or 3? Do the distributors use sub distributors? Do we have visibility of this? Have we considered all tiers and sub distributors? Are these included on our map?
  7. Are we working with our distributors to understand their business, their issues and how we can help each other?
  8. Have we assessed the performance our distributors to determine the most effective from the least?
  9. If trade coverage is about penetrating the retail or POS environment, how do we assess the distributors that have the most passion or the best relationships in place to deliver on this? How do we determine which distributors have the passion for and understand the complex retail environment in African countries?
  10. Do we truly partner with our distributors? Do we provide them with the necessary tools to deliver on our shared goals?
  11. Do we have a field sales force that is supporting our distributors? Do the distributors have a sales force? Do they offer training and engagement on how our trade coverage can be increased? Do they understand the importance of trade coverage to us??
  12. Do we offer incentive programmes for trade coverage increases? Do we have a process in place for measuring this?
  13. In areas where we are either weak or have limited presence have we identified distributors that we can partner in those zones?
  14. If we feel there are no local options in the so-called weak trade coverage zones, have we looked at bringing in or introducing a distributor from one zone into another? Have we done this before?  Do we have any learnings or past successes that we can use in these weak trade coverage zones??
  15. Have we ever partnered with a distributor to set up in a new zone before? What was or could be involved in this? Did we support the set up financially and/or with people resources?
  16. Is setting up any form of direct distribution an option? Are the risks or costs too great? Has this been done by any supplier in the market to date? What would the potential consequences be of doing this?
  17. Have we looked at how the competition are looking at maximising their trade coverage?
  18. Where does modern trade or key accounts come in here?
  19. Is there a presence of group owned and organised outlets in my geography? If so, are there key account or other agreements in place that mandate the presence of our SKUs across the entire network? If there are, how are these currently measured? If there are no key account or other agreements, why is this?

Finding the right partners in the right areas, across Africa, to increase trade coverage, is very difficult. During 2019, Enchange has faced these challenges in multiple markets across Africa, and in each case have delivered a Route to Market strategy to win for our clients.

My goal here is to stimulate the thinking around how to increase trade coverage in African markets. I would love to get your comments and opinions in the sections below on the challenges and solutions you have found to increase trade coverage in Africa.

Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution. If you would like to know more about our approach to Route to Market excellence click here.

Tags: Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Doing Business in Africa, Information, Retail, 3PL, RTM, 3PLP, 4PL, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

How do FMCG Companies Increase Sales Volume in Africa?

Posted by Ross Marie on Fri, Oct 04, 2019

It’s a good question and one that Enchange is often asked. Enchange has been helping clients in Africa for over 25 years. Whilst many things have changed in that time, for example, the use and availability of technology, many things remain the same.

Achieve FMCG sales growth in Africa

One of the constants in African markets for consumer goods companies is the difficulty and complexity of the Route to Market. Not only are there potential cultural, political, geographic, security, logistical, commercial, financial, (I could go on?) etc., considerations, but there are also availability issues. Not availability in terms of products, brands or SKU’s, but availability of effective distribution and distributors.

If we accept that a majority of FMCG multinationals choose Indirect Distribution in African markets, then they are relying on other people to look after the movement of product from factory to consumer.

So, who are these ‘other people’? There are many different types of distributors across Africa. Although large international operators can be a rare as the beautiful Pangolin, there are some large organised international logistics operators, sometimes referred to as 3PL or 4PL’s. There are local distributors who cover specific territories, there are smaller internationally owned operations who can operate across several markets or be country specific. There are some distributors who supply some smaller distributors, often referred to as sub distributors, stockists or sous dépôts. There are also individual single person distributors, in some cases using non mechanised distribution methods.

Most of these organisations deliver product to retailers, but some supply wholesalers or cash & carry’s, where the retailers usually collect from. All of these organisations vary hugely in size, sophistication, execution, ability, communication, information sharing, resources, effectiveness, coverage and in delivery of specific or agreed results. Very often the difficulty can be finding these organisations, especially when the geography becomes more rural.

So, to begin answering the question, ‘How do FMCG Companies Increase Sales Volume in Africa?’, we need to ask a few more questions of our own:

  1. Have we graded, assessed or ranked our current distributors, and those potentially available across the country?
  2. Do we have an agreed approach to managing our distributors?
  3. How often do we visit them? Do we have our own people on the ground in and out of the distributor’s location regularly? Do we attend retail visits with our distributor’s teams?
  4. Do we understand our distributors issues? Do we really understand our distributors’ issues? Do we really, really, really understand our distributors issues? You get the point.
  5. Have we properly conveyed our goals? Have we set them realistic objectives?
  6. Have we provided an incentive for them to achieve these objectives?
  7. Do they have the resources and the route map to deliver on what we have asked?
  8. Do they have their own people visiting retailers? Are these people properly trained? Do they have the right tools to deliver?
  9. Do they understand relationship management from a large or small distributor level, through sub distributor, wholesaler level, down through key account, modern trade convenience or grocery level, right down to mom & pop stores, street vendors, open windows, kiranas, souks, spazas, (or whatever term we use for small independent stores)?
  10. Have we assigned territories or zones to our distributors, not only to ensure we have full coverage of the retail universe, but to make sure we are essentially not fighting with ourselves?
  11. Are we sharing success and the routes to success from one distributor to another?
  12. Where does our competition fit into this scenario? Are they using the same distributors as we are? Is the competition achieving better results than we area? If so, why?
  13. Do we have agreed commercial terms with the distributors?
  14. Are these commercial terms fully understood and is there an operational plan to achieve them?
  15. Has this operational plan been cascaded down through the distributors organisation and clearly explained? Has this explanation filtered out to the distributors retail facing staff?
  16. Do we provide feedback to distributors? Is this feedback constructive and centred around improving performance?
  17. Do we use both the carrot and the stick approach? Do we use too much stick?
  18. Do we work in a cash or credit market? If the latter, how do we control credit in all parts of the distributive supply chain? How do we ensure, for example, that distributors use credit to fund the working capital for our product & not their other businesses?

These, and other questions like them, are what Enchange have been answering for many years, including specifically in 2019 to deliver results focused Route to Market strategies for our clients.

Please subscribe to my blogs on the top right hand side of this page, to ensure you don’t miss the latest updates on RtM excellence in execution. If you would like to know more about our approach to Route to Market excellence click here.

Tags: Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Doing Business in Africa, Transportation, Retail, 3PL, RTM, 4PL, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Deliver Route to Market Excellence in Multi Distributor Markets in Africa

Posted by Ross Marie on Fri, Sep 27, 2019

How do we implement real change to deliver the best possible Route to Market (RtM) in challenging developing markets? Enchange has been in the business of transforming clients Route to Market (RtM) for over 25 years. Last year I built on that bank of knowledge by developing and sharing the 20 Steps to Route to Market Excellence. This was designed to not only showcase how we approach RtM, but also to help our clients, our followers’ and those with any RtM issues to systematically examine their own RtM strategy and execution.

Route to Market Excellence in Multi Distributor Markets in Africa

In 2019 Enchange has been engaged in several major RtM transformation projects for our multinational clients. A number of these projects have been in vibrant and growing African markets. Enchange knows Africa very well having been founded there over 25 years ago. We love nothing more than the excitement and challenges involved in delivering RtM excellence in Africa.

Whilst no two clients or projects are the same, there are very often some common themes. The markets we are currently working in are a mix of major cities and expansive rural areas. These markets have, in some cases, extreme volume concentration in these cities. They are all indirect distributor led markets, which means our clients don’t control the movement of their own product from factory or warehouse, through the supply chain right up until the point of sale.

I could go on about the similarities in these markets, but what about the key challenges? Again, there are many common themes. Let’s look at some of the top issues faced by Fast Moving Consumer Goods (FMCG) companies in multi distributor markets in Africa:

  1. How can we increase sales volume through our distributors?
  2. How can we increase trade coverage through our distributors?
  3. How do we better manage our distributors? How can we help our distributors better manage and support their sub-depots to achieve our common goals?
  4. How do we beat the competition in a multi distributor model in Africa?
  5. How do we motivate and get the best out of our distributors?
  6. How do we assess the performance of our distributors?
  7. How do we develop a program to better partner with our distributors?
  8. How do we improve the resources within our distributor’s organisation?
  9. How do we get the best from distributors with limited resources?
  10. How do we integrate and make the best use of technology in our RtM strategy?
  11. How do we guard against, minimise and/or prevent bad debts? How do we manage any cash or credit process?
  12. How do we get the desired brands and product ranges into the right channels?
  13. Is our internal RtM structure designed to best support our distributors?
  14. How can we help our distributors to better achieve our common goals?
  15. What level of resources and tools should be employed to drive distributor success?
  16. How do we manage distributor territories/geographies/zones? Should we or can we assign a distributor to a specific geography?
  17. Should an FMCG supplier look at getting directly involved in distribution? If so, to what extent, at what level, across what geography and to what consequence?
  18. Do we really understand the relationships through the supply chain right up to POS?

In 2019 Enchange have faced all the above challenges in African markets. Some of these challenges we faced in markets with sales growing, some with sales initially declining, some with pockets of growth or decline, some with good trade coverage some with poor trade coverage, and everything in between.

But in all cases, Enchange have delivered a Route to Market strategy to win for our clients. Over the next number of blogs, I will share more information about how we have delivered success for our FMCG clients in Africa.

Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution. If you would like to know more about our approach to Route to Market excellence click here.

Tags: Brewing & Beverages, FMCG, Route to Market, Performance Improvement, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Doing Business in Africa, Order to Cash, Retail, 3PL, RTM, 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

Learn the 10 Steps to Make S&OP Work in Mobile Telecoms

Posted by Michael Thompson on Fri, Jul 22, 2011


In my blog post Reasons for establishing S&OP in Mobile Telecoms, I recounted a success story of S&OP in a mobile telecoms company.  I then went on to discuss the principles of S&OP design in the post Learn the 8 Basic Principles of S&OP in Mobile Telecoms.

My discussions with Colin, our Mobile Telecoms Executive, continued.  Colin is a Senior Executive with a mobile telecommunications company with operations in several markets in Africa.

We started talking about the nuts & bolts of how S&OP could actually work in a mobile telecoms company. 

We designed the outline of an S&OP process including with a regional supply chain and operational structure in mind.  Diagrammatically the design we came up with was as follows:

S&OP Process for  Mobile Telecom

The process commenced with input from the regions within the country – we called this regional S&OP.  The demand review considered inputs from local marketing activity and the regions; the forecast also considered trade data. 

The supply review considered two main series of activities. The supply plan and product purchase plan considered the provision for mobile handsets and other items sold in the local market (NB some markets also used scratch cards that sold airtime). A network plan and equipment purchase plan looked at the supply needs to maintain the network.

Following a financial evaluation of the demand and supply plans, a national pre-S&OP consensus meeting was undertaken. The process concluded with the monthly S&OP meeting to agree the plans.  Following this demand execution and supply execution processes put the plans into action.

As it happened the design was similar to the one that Enchange has used in the past with mobile telecoms companies in African markets.

Let’s see if it does the trick for Colin.

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Learn the 8 Basic Principles of S&OP in Mobile Telecoms

Posted by Michael Thompson on Fri, Jul 15, 2011

In an earlier blog Reasons for establishing S&OP in Mobile Telecoms, I recounted a success story of S&OP in a mobile telecoms company. Reasons for establishing S&OP in Mobile Telecoms.

I continued my dialogue with the Senior Telecoms Executive – let’s call him Colin.  His company operates in several markets in Africa.

S&OP in Mobile TelecomThe challenge we set ourselves was to design an S&OP process for a mobile telecoms company.

In the first instance we explored some of the basic features of S&OP. 

Mike: Do you remember how we started in your last organisation?  (Colin used to work for an FMCG multinational in Africa.)

Colin: I seem to remember we started with some principles.

Mike: Exactly.

Colin: So what are the basic principles of S&OP in mobile telecoms.

Mike: To a great extent the same basic principles apply in mobile telecoms than they do in any other type of business.

Colin: How can that be? Mobile telecoms is an entirely different business.

Mike: You are confusing process design with basic principles.  While the design of S&OP in a mobile telecoms business is different, the basic principles still apply.

We then spent some time discussing the basic principles of S&P in any business and tested these assumptions in mobile telecoms.

Here is the list of 8 Basic Principles of S&OP in Mobile Telecoms:

  1. S&OP is a collaborative cross functional process that engages all functions to produce an integrated set of plans that all are committed to support. 

  2. The plans cover a sufficient time horizon to enable resource planning & support the annual & strategic planning processes.

  3. Its purpose is to balance demand & supply in the supply chain. 

  4. It is performed periodically – monthly or weekly.

  5. It aligns operational plans to high level business & strategic plans.

  6. It can be implemented at a market, regional or global level.

  7. At its core is a single set of numbers for the business.

  8. It uses standardised processes, calendars of events & meetings &  KPIs.

There then followed a further discussion about the design of S&OP in mobile telecoms. 

I will; discuss this in a later blog.

S&OP in Mobile Telecom in Africa

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Reasons for establishing S&OP in Mobile Telecoms

Posted by Michael Thompson on Fri, Jun 17, 2011

I have two recent stories to tell.

Story 1

Recently I was chatting to a Senior Executive in a mobile telecommunications company. We first met about a decade ago when he was the Supply Chain Director for an FMCG multinational in Kenya.

S&OP in Mobile TelecomThe conversation was comparing his former life in FMCG to his current life in a mobile telecoms company. I should mention that the FMCG company was a mature business and the mobile telecoms company is a relatively new and growing business.

To paraphrase, it could be summed up in one of his expressions "The energy is great. But I could do without the chaos."

This compares to the relatively stable and predictable working life he remembered from his previous FMCG position.

I should also mention that one of the reasons for this ‘stability’ was that Enchange had implemented S&OP in the FMCG company – that is how we first met.

We reminisced.

“Do you remember when things were also chaotic before? And do you remember how we sorted it  out?”

I continued “Have you ever thought of implementing S&OP in your mobile telecoms company?”

“S&OP in mobile telecoms?  Does it work?”

Story 2

I have just returned from DRC (Democratic Republic of Congo) and met up with a former client manager - she now works for Enchange as a consultant.

In her previous position she was an operational manager and worked on an S&OP project that Enchange implemented in the company. It was a mobile telecoms business.

I asked her if the project had delivered the results that were expected and the extent to which the change had been sustained.

Her reply was revealing.

“Everybody was sceptical at the time the project was implemented. However it ended up transforming (her word, not mine) the way the business was run.”

I asked her to explain. The key difference was that consensus and order had over time replaced bitter argument and chaos.  However, the energy of a new and growing business remained.

“We got the best of both worlds”.

And the moral is?

I mentioned this story to the Senior Telecoms Executive.

Having not even considered S&OP, we are now actively discussing how S&OP could work in his new company – a mobile telecoms business.

More later.

Tags: Telecoms, Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Supply Chain Blog Enchange Oscars - and the Winner is...

Posted by Michael Thompson on Tue, Mar 08, 2011

Lest we were caught up in the furore of the Hollywood version, it is now time to announce the winners of the inaugural Enchange Supply Chain Blog Oscars.

Without further ado:

  1. Best Route to Market Blog – goes to Evaluate your FMCG Route to Market Distributor Network
  2. Best Sales & Operational Planning Blog – goes to Top 6 Critical Success Factors of S&OP in Africa
  3. Best Supply Chain in Africa Blog – goes to The Challenges of FMCG Supply Chain & Route to Market in West Africa
  4. Best Supply Chain in Central & Eastern Europe Blog – goes to 7 Ways to avoid overstocking FMCG distributors in CEE
  5. Light Entertainment Category – goes to The Top 10 Smash Hits of FMCG Route to Market Distribution
  6. Best Adaptation of a Supply Chain Theme – goes to Santa & Opening Presents - Why S&OP is Invaluable at Christmas

And finally:

Supply Chain Blog of the Year is Top Ten FMCG Supply Chain New Year Resolutions for 2011

Thank you to all our readers who have voted.  Enchange has made a donation of GBP 1 pound to our supported charities in Kenya & Romania.

supply chain blog oscar 2011

Tags: FMCG, Route to Market, Humour, Michael Thompson, CEE, S&OP, Doing Business in Africa

Top 6 Critical Success Factors of S&OP in Africa

Posted by Michael Thompson on Thu, Feb 17, 2011

I have been delighted by the response to my recent blog on the 11 critical success factors in Route to Market programmes.

One comment in particular has inspired this week’s blog.

It went along the lines of "we are about embark on an S&OP programme in Africa and want to understand if similar critical success factors apply."

The short answer is that some do & some don’t. 

Success factors of S&OP implementation in Africa

So here is the Top 6 Critical Success Factors to consider when implementing S&OP Programmes in Africa:

1. End Market (EM) Commitment & Ownership:

  • End Market Senior Management – all of them - need to be convinced.  Generally they are sceptical about such programmes that originate from HQ.  Time spent doing this properly is always time well spent.
  • The CEOs/GMs can make or break the programme; the success of S&OP is directly proportional to the commitment & ownership shown by the CEO.  It is not a supply chain programme.
  • Programmes need a ‘sell’, NOT a ‘tell’ approach.
  • End Market operational team engagement is always critical but will not happen if CEO buy-in is below 100%
  • The initial message from HQ will be very important in establishing realistic expectations.

2. S&OP Process Design (assuming a standard S&OP Design):

  • Standardisation – key is establishment of the ‘S&OP Template’ of key processes (e.g. SCOR Levels 1, 2 & some 3) with local End Market adaptation within ‘reasonable’ boundaries.  Keep the ‘rules’ robust and to a minimum.
  • Level 3 Design – use some End Market development as an opportunity to develop local ownership with local teams.
  • Keep it simple for Op Co execution.

3. People & Management of Change:

  • Most S&OP programmes involve significant change.  Ensure that as a minimum, the following are addressed in some way: 
  • Create a change management strategy - start with readiness assessments;
  • Engage senior managers as sponsors of the change;
  • Ensure communication develops a strong message and awareness of the need for change;
  • Involve people through the transition including by workshops in the design and implementation stages;
  • Ensure ample education & training to support the change;
  • Measurement & Reward - gauge progress (e.g. KPIs), reward appropriate behaviours (e.g. bonuses) and reinforce (e.g. award schemes) to sustain the change.
  • Avoid excessive delay (for any reason) – people will lose interest.
  • Above all, appoint a dedicated Change Manager.

4. People & Culture:

  • One size does not fit all in Africa & Middle East.
  • Any S&OP programme must be adapted to account for the local business culture.  Failure to do so will likely be disastrous – I have seen many examples.

5. Information Technology:

  • S&OP should not be an IT led project.
  • But the business & financial success of the programme is usually directly proportional to supporting ERP (e.g. SAP) effectiveness, planning tools, data capture and master data management.
  • Consider interim IT tools – these can work extremely well & maintain programme momentum before the full IT solution is implemented.

6. Measuring Performance & Managing for Success:

  • Decide programme outcomes in advance.
  • Decide what is not negotiable.
  • Be prepared to learn and adapt during the programme.
  • Use established Project Management methodology (e.g. Prince 2 – a ‘Lite’ version please) – plan, review etc.
  • Establish KPIs – consider a Balanced Scorecard.
  • Indicate the benefits early.
  • Build End Market success into CEO/GM/Board bonuses.

I have focussed on our experience from S&OP programmes in dozens of African countries.  Upon reflection, the above also apply in varying degrees to S&OP programmes in other parts of the world; I would welcome your views.

If you are wondering if you need S&OP in Africa, I wrote about this last year in an article - Doing business in Africa - 11 signs that your S&OP needs improvement.

And of course, if you need any advice, including on an informal basis, please just contact us.


If you are interested in S&OP, you may also be interested in some other Enchange blogs:  Many are light hearted. 

Oscar Supply Chain Blog

Tags: Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Doing business in Africa - 11 signs that your S&OP needs improvement

Posted by Michael Thompson on Fri, Oct 29, 2010

“We’ve been doing S&OP in our African Operating Companies for 5 or 6 years .... & it’s still not working properly....”

This was one of several discussions we have had with clients over the last couple of weeks and something of a recurring theme.

Although many of the countries in Africa present unique challenges, the principles of S&OP are the same as anywhere else.

A good place to start is looking at organisation capability and the outcomes that S&OP should deliver.

So here are 10 (plus 1) questions to consider:

  1. Customer service. Are your customers enjoying consistent & excellent service levels?
  2. Planning Processes.  Do your supply chain planning processes deliver optimum levels of service & cost?
  3. Inventory.  Do you have full visibility of stock & are inventory levels at or below best practice industry standards?
  4. Logistics & Route to Market.  Is your distributive supply chain a source of competitive advantage?
  5. Measures & Performance.  Do your KPIs quickly identify performance opportunities & guide corrective intervention?
  6. Decision Making.  Is decision making proactive & at the correct level in the organisation?
  7. Competency.  Are your people fully able to manage the demands of your supply chain?
  8. Data.  Do you operate your supply chain with one set of numbers?
  9. Systems.  Are your IT systems fully optimised to support your supply chain?
  10. Cost.  Are your total supply chain costs at or below best practice industry standards?

And in a world with limited resources:

 11. Low Carbon.  Does your supply chain have the lowest   possible carbon impact?

    If you have answered “yes” to all of the above, you have fully functional S&OP process that supports an optimised supply chain.

    If you have answered “no”, there will be clues to begin the process of improvement.


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    Tags: Michael Thompson, S&OP, Forecasting & Demand Planning, Doing Business in Africa