Supply Chain Blog

Viva Africa United :World Cup Business Improvement

Posted by Michael Thompson on Tue, Jul 13, 2010

Well its over & the African showcase that was the World Cup has finished.  As Spain (deservedly) celebrates and the circus leaves town, I am left to wonder “what next” for the continent?

Viva Africa UnitedThankfully I am not the only one in a similar reflective mood.  David Smith considers LAWC (Life After the World Cup) in the Guardian.  His article includes reference to this being a “transformative moment” on par with the release from prison of Nelson Madela.  He also cautions against premature optimism.  This is wise.

My musings, my concerns are somewhat broader. 

In the aftermath of a dismal England exit, I was in a similar reflective mood.  It was something of a “what has the World Cup done for us” moment as borrowed from Monty Python’s Life of Brian.

 

I return to my first World Cup blog, “Africa, the World Cup, & Supply Chain – what’s the connection?”. It will take many generations for Africa to reach “a ‘tipping point'; the point at which Africa emerges into an economic block that the world has to take seriously. A transition from recipient of sympathy and aid to proud and able wealth.”

So now that the show has left town, how will things change for most South Africans & Africans? How will their lives have been enriched?

I remain an ‘Afro-Optimist’, of the glass half full persuasion.  As the attention of the World Cup fades, I believe that the collective conscience has been changed for good & forever.  Our South African hosts have, I believe, left a positive legacy for the continent.

And fittingly this was reflected in a banner at the end of Sunday’s final that read “Viva Africa United”.

 

Photo credit: babasteve

Tags: Michael Thompson, Doing Business in Africa

Oh Ghana: Supply Chain Progress denied by the hand of Suarez

Posted by Michael Thompson on Tue, Jul 06, 2010

Oh Ghana, Ghana! wherefore art thou Ghana?

Deny thy goal by penalty in the last minute of extra time and refuse thy destiny;

Or, if thou wilt not, be but sworn to do better in the shoot out,

And we’ll no longer be denied an African team in the semi-finals.

.... and so a continent mourned in noble defeat.

.... And to address my own earlier question (not answer it, please note):

“What has the World Cup done for them?”

It has given a continent hope, albeit briefly & albeit on a football field in Johannesburg.

It may not be Romeo & Juliet, but there was something of a Shakespearean tragedy about this football match.

Ghana World cup and Shakespeare

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Tags: Humour, Michael Thompson, Doing Business in Africa

Doing Business in Africa – S&OP is part of the answer

Posted by Michael Thompson on Wed, Jun 30, 2010

A short rest from the World Cup today.

I speaking to a colleague today who had attended a conference last week about doing business in Nigeria.

There were echoes from several chats I have had recently with some of our West African clients including those in Nigeria. Business is buoyant. Lots of investment. Plenty of activity.

And something of an urgency ... to do the right thing. Senior managers are saying:

Improving S&OP"We need to get our decision making working properly ...."
"We know the limits of the forecast, but don't seem to factor this into our operational plans ...."
"Everything is reactive .... fire fighting all of the time ... and why couldn't we see it coming ...."

Nothing new here. Supply chain folk will recognise these as symptoms of a poorly performing, or non-existent Sales & Operational Planning (S&OP) process.

But this time the same managers added:

"We implemented an S&OP programme last year .... & it's just not working properly ..."
"We have started to get our act together but the distributors are still all over the place ..."
"The competition are catching up ... seem to be better organised ... we need to do something soon ..."

It was these comments that caught my attention. There seems to be a recognition that S&OP has to improve ... & sooner rather than later. And this time, we need to involve the distributors.

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

England Out of Africa

Posted by Michael Thompson on Wed, Jun 30, 2010
"... and another thing ... they're all paid millions ... and now it's all over, they all disappear on holiday ..." (leaving us to pick up the pieces of our shattered dreams is the unspoken message).

And so continues another England footballing obituary, one of thousands uttered in the trains, offices, corridors, waiting rooms, air waves of England & beyond in the aftermath. This one was, with no small amount of passion it has to be said, with by my new friend on the 07.25 to London Victoria on Monday morning.

" .. I wouldn't mind", he continued, "but look at all the people they have let down .... the fans who have spent all that money on trips to South Africa .... fortunes ... 1,000's of pounds ...."

So I thought I'd wait at least another day to let the angst subside. A period of reflection was needed. Let the anger drive some wisdom. A more considered view would emerge. Well it hasn't.

England were just not good enough. That's it.

Forget the excuses of tired players, inept coaches (we've tried a succession of English & overseas versions), players in the wrong position, injuries etc, etc. My view (for what it is worth) is that as long as club football & the Premier League run the show in England, it will remain thus. England wants club football more than a successful national team because .... that's where the money is. Until that changes, the dreams of national glory will remain just that - dreams.

So let's move on & enjoy the remainder of the World Cup.

But something is missing - other than England in the quarter finals that is.

I had hoped that some more of the African nations would make it past the group stage; now Ghana carries a continent's hopes.

But it's not that either.

After the 11th July when the show leaves town, and the memories fade, how will things change for most South Africans? How will their lives have been enriched?

Doing Business in AfricaWhich brings me back to my new friend on the train. While he was (rightly) sympathising with the causes of disenfranchised English travelling supporters, I could not help wondering about the locals who couldn't afford a ticket. Many of these people would have watched the football on a local big screen only to return to their reality of slum-living, sanitation-free desperation later that night.

What has the World Cup done for them? Such thinking is maybe where the wisdom should be.

 

 

Tags: Performance Improvement, Michael Thompson, Doing Business in Africa

Vuvuzelas and the value of S&OP

Posted by Dave Jordan on Tue, Jun 29, 2010
Suddenly, many companies in South Africa are grossly overstocked with red, white and blue Vuvuzelas! They will not be allowed at Wimbledon and even the cricket authorities would think twice. Skiing, possibly? There may be quite some capital tied up in these noisy plastic horns so let's take England as an S&OP case study.

The product development process went extremely well over a 2 year period involving lengthy travel to various European cities for meetings. The development process was completed on time with only one data loss which did not impact on the network. The brand value and popularity was greatly enhanced during this logistical challenge across Europe and into CEE.

Product development and S&OPThe format of the product range was moulded at an early stage with a fairly settled selection of SKU's. Inevitably, there was some debate about the wisdom of launching certain SKU's but the often used argument about the importance of specific sku's to the range was compelling. The management committed to revising the SKU list after a short pre-launch test market.

Various formulations were tested with some mixed success. The test market was deemed to have gone reasonably well; some adverse comments on performance but overall the product was good and deemed ready for launch roll out. A very late decision was taken on SKU rationalisation and prior to launch 7 SKU's were delisted and a group of 23 went into the launch phase. Despite a wobble in the test market the launch was expected to be a great success leading to huge demand for Vuvuzelas over the next 2 months.

The big launch! An American competitor appeared at the same time as the England product and in performance terms there was little to choose between them. There were a few negative signals but the Vuvuzelas kept streaming off the production line in anticipation of ultimate success.

The Vuvuzelas sang out as the England product came up against a vastly inferior North African model. Surprisingly this time there were serious failings with the England product and it simply did not perform well enough. The efficacy of a number of key SKU's was questioned with some people also questioning the Project Manager as he kept some useful SKU's off the shelf. Still, all the preparation was good so why should we lower the Vuvuzelas order? Everything will be ok.

The next test was to ensure superiority over a CEE offering to ensure England was rewarded with a gondola end display competing against the established brands. Success was achieved albeit without any major performance enhancement and the gondola end was secured. Get those Vuvuzelas moving off the production line, this is it, this is the real thing! Success in the market place after almost 50 years was assured, wasn't it? The Vuvuzela demand was raised once more as expectation grew about the impending global success.

Ok, onto the gondola end and directly opposed to a German range of relatively new and untried SKU's. The English SKU's were believed to be a premier product and which had certainly been assembled at great expense. From the development stage through test market the England product was deemed vastly superior to other models and the Vuvuzelas screeched out in support.

How wrong they were! Virtually all SKU's performed miserably both collectively and on their own. It was a sorry sight to see the German product gain 4 market awards to England's one. England claimed a second award was wrongly taken from them by the South American Mystery Shopper but it did not change the overall result. The England product was delisted and returned to the supplier.

By now the Vuvuzela factory was working 24/7 to keep the supply chain full. Even as the delisting occurred more and more Vuvuzelas were moving on trucks. What on earth are they going to do with all those England Vuvuzelas? Nobody wants them now.

The signals were there in test market but they were ignored under the marketing hype. The early market feedback raised further doubts about the certainty of success but again this was not taken into account in business planning. The notion that every single brand launch must be a success because marketing said so was highlighted as complete folly. However, don't blame marketing for the huge stock pile of Vuvuzulas. The signals were clear at a number of stages but those important signals did not get fed back into business discussions for future adjustments to be made.

As a result of failing to look at the harsh reality of market feedback, demand was continually over-estimated and the business left with a huge stockpile of squeakable plastic. Had a robust and interactive S&OP process been in place the production line could have been quickly changed to make gold Vuvuzelas which are certainly more durable!

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Image credit: lisatozzi


Tags: SKU, Dave Jordan, Humour, S&OP, Forecasting & Demand Planning, Doing Business in Africa

Doing FMCG, Pharma Business in Africa : England vs USA World Cup

Posted by Michael Thompson on Wed, Jun 16, 2010
The inevitable post-match, post-mortem. A bunch of lad's dads extolling wisdom & virtue on a Sunday morning after the night before. What was Capello thinking about? If we can't beat the USA, what hope is there? Green the villain; Green the unfortunate; Green the .... take your pick.

When the lad's started their cricket match, it was not enough to distract the dadsAfrica & Football & so we continued trying to put the football world to right, thus ensuring that England could indeed still win the World Cup & the USA ‘warm-up' was in fact a much needed wake-up call.

That is until someone started talking about Africa.

"Did you see the Jonathon Dimbleby programme about his trip through Africa? ... Great wasn't it? .... would love to visit .... take the kids ... open their eyes ..."

Having worked in Africa since 1993 & been fortunate enough to live in Kenya for 3 years in the 1990's, I couldn't resist. Off I went. The places visited. The countries in which we had worked ... no it is different in Nigeria ... . The stories. The expert expat.

It turns out that his friend is about to be posted to Kenya & wondered what it would be like.

On we chatted. I was reminded about what it was like when we first arrived - I started a Supply Chain consultancy business in Kenya. It was a wonderful adventure, full of colour and full of frustration.

I was also reminded about a paper that I had written & presented to an audience in Washington about living & working in Africa.

"Tell you what", I said to my new friend. "I'll dig it out & send it to you". And if your friend wants to chat about it ...."

The boys won by the way; their cricket match that is. And so the world was good again as we left the cricket ground & headed for a BBQ in the afternoon & another chance to put the football world to rights as the Sunday papers reminded me of Saturday night ....

If you would like a copy of "Doing Business in Africa", two pages that I hope still contains some wisdom, complete with a snappy acronym .... CLICK HERE

 

Interested in doing business in Africa? Read more here!

Image credit: stock.xchng


Tags: Michael Thompson, Doing Business in Africa

Africa, the World Cup, & Supply Chain – what’s the connection?

Posted by Michael Thompson on Tue, Jun 15, 2010
Well it has finally started. The world cupis here. And Africa is centre stage again in the collective conscious of the world. Not since the G8 summit in July 2008 has the world turned its attention to Africa; too often the forgotten continent.

Countries in Africa (I will generalise and refer to ‘Africa') have been blighted for decades. A toxic combination of chronic misrule, corrupt regimes often propped up by well organised government sponsored thuggery (about the only thing some regimes have been good at organising) and conflict have left many countries mired in long term depravation and poverty.

Poor medical care, sanitation that would make most of us wince (the smell of the slums can make you gag), inadequate clean water, high infant mortality, appalling human rights, low levels of education, disenfranchised women (in the broader sense), AIDS, subsistence living (GDP per capita levels in some countries barely exceed one dollar a day) ... and so the list goes on.

Normally of course it is the famines that grab the headlines; another all too frequent occurrence that blight's the continents' people.

A sick, corrupt, unfortunate and often forgotten place, wallowing in its own misery, slowly dying of ignorance ... That's Africa as far as many people are probably concerned.

But it doesn't need to be like this. Much of the continent is blessed with rich natural resource. There are fertile soils, minerals that the world needs (gold, copper, diamonds, cobalt, uranium, manganese ...), and oil that the world craves. Their people are warm, welcoming, inventive, and bright (given half a chance with a decent education). Most of all they are resilient; just as well really.

But things are changing. Yes it may be slow - nothing happens quickly in Africa. Pole pole (Kiswahili pronounced pole-ay pole-ay) as they say in Kenya.

Many countries in Africa are enjoying strong economic growth. 80% of African countries grew in 2009 compared to only 10% of OECD countries. In 2010 Africa is forecast to grow by over 4% (some estimates are over 5%). Compare this to OECD forecasts of less than 3% and less than 2% in the Euro Area. African growth is predicted to increase further in 2011 and beyond. Africa is also attracting large amounts of direct foreign investment, notably from China.

Africa is no longer an economic backwater.

But we are yet to reach anything close to a ‘tipping point'; the point at which Africa emerges into an economic block that the world has to take seriously. A transition from recipient of sympathy and aid to proud and able wealth. Dare they dream? Perhaps an ability to house, feed, care for and educate her people would be a good aim.

In the meantime, more than anything what Africa needs now is to be respected.

And this is where the world cup comes in. Africa will be the centre of world attention for the next month. It is of course a chance to enjoy Africa and its rich vibrant life and colour; we saw a glimpse of this in the opening ceremony.

Moreover it is an opportunity to look at Africa in a different light.

Doing Business in AfricaSuspend for a moment your prejudice. Listen when she speaks. Open your minds to the opportunities that exist. This is a continent of some 840 million people. That's more that the populations of the EU (500m) and USA (308m) combined. That's 840 million economic opportunities, each of whom could be eating your food products, drinking your drinks, cleaning with your soap, being treated with your pharmaceuticals and doing business on your mobile phone network. And remember the headroom for growth is enormous. Get it right and the rewards are potentially great.

And what has this got to do with supply chain? Everything. That is if you want your product to be available (planning) at the point of sale (route to market) at the lowest possible cost (including planning again).

So as you enjoy the football, consider what else Africa offers. It is more than a great place to visit - though that is certainly a good enough reason to go. It is a great place to do business.

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Tags: Michael Thompson, Doing Business in Africa