Supply Chain Blog

FMCG CEO appears on Supply Chain Mastermind

Posted by Dave Jordan on Thu, Jun 13, 2013

Cue the famously ominous theme music, "Approaching Menace" by the British composer Neil Richardson. A hushed, shadowy, darkened studio. Contestant number one leaves his competitors in the dark and walks in a moving beam of light to the famous black leather chair. One harsh spotlight focussed on the face of a nervous FMCG CEO.

CEO_Supply Chain _QuizMagnus: Please state your name, occupation and specialist subject.

CEO:  Arnold Businessman, FMCG Company CEO and my specialist subject is the extended Supply Chain.

Magnus:  You have 2 minutes starting from now.

Magnus: What is the prime Supply Chain business planning tool in your company?

CEO: The expensive ERP IT package.

Magnus: No, it is Excel spreadsheets.

Magnus: How many SKU’s does your business have?

CEO:  157

Magnus: No, 454 including promotions.

Magnus: Is your forecast accuracy based on volume, value, brand or sku?

CEO: Volume.

Magnus: Correct answer but actually wrong in practice.

Magnus: When monthly sales figures are poor, does the sales team takes responsibility?

CEO: Pass.

Magnus: Yes, pass the buck. I will accept your answer.

Magnus: Do multiple warehouse storage locations affect overall inventory levels?

CEO: No.

Magnus: Incorrect, they do and upwards.

Magnus: Who has overall responsibility for S&OP process quality?

CEO: It is a Supply Chain problem.

Magnus: No, you do.

Magnus:  What is your Customer Service Level?

CEO: 98%.

Magnus: Correct, but….

Magnus: Is this figure based on orders or stock availability?

CEO: Pure orders.

Magnus: Incorrect, orders are manipulated to sell what is available.

Magnus: Which team is responsible for On Shelf Availability?

CEO: Sales

Magnus: Incorrect, the S&OP team.

Magnus: Will you still have a BEEP BEEP BEEP BEEP – I’ve started so I’ll finish - job at the end of this show?

CEO: Yes.

Magnus: Pass.

Magnus: At the end of that round Mr. Businessman you have scored 3 correct results and I had 1 pass. Thank you.

Polite applause as the CEO heads back to his seat with head bowed and rightly so. His big chance of Supply Chain TV fame blown apart in the space of 2 awkward minutes.

Arnold can try again next year but in the meantime for the sake of the company and his career he should get far closer to the Supply Chain related realities within his FMCG Company.

Cue Approaching Menace once more……...

Image courtesy of artur84 at freedigitalphotos.net

 

Tags: FMCG, Dave Jordan, CEO, ERP/SAP, Supply Chain, S&OP

FMCG, Pharma & Beatles? Spreadsheets damage more than your ERP

Posted by Dave Jordan on Tue, Jun 11, 2013

Some time ago I wrote about the way spreadsheets were undermining expensively assembled ERP’s in FMCG, Brewing and Pharmaceutical companies. They still are, by the way.

Recently, a paper on Public Debt and Austerity published by 2 eminent Harvard Professors was found to contain errors in the Excel coding. Several significant countries were excluded from the data analysis and therefore the conclusions could not be accurate.

The glitch was spotted by a student who like everyone else, believed he and not they must be wrong. If you can make mistakes at this level then think what may be happening in your planning office. A decimal point in the wrong place or a misplaced cell could lead to market place challenges in stock availability or indeed, excess.Beatles_ERP_Spreadsheets

The bug in that Public Debt spreadsheet leads me to the Beatles – what a segue! Here is what they might have written about spreadsheets and ERPs.

Yesterday, an IT man took my Excel away
Now I have to plan a different way

How I wish it was yesterday

Certainly, I’m not as comfortable as I used to be
There's a new ERP in front of me.
How yesterday came shockingly

Why Excel had to go I don't know, IT wouldn’t say
Did I plan something wrong? How I long for the Excel way.

Yesterday, spreadsheet planning was the only way
Now I need to learn a different way
I need to believe in the ERP

Why Excel had to go I don't know, IT wouldn’t say
Did I plan something wrong? How I long for the Excel way.

Yesterday, poor planning was the only way
Error riddled spreadsheets everyday
Now I don’t believe in yesterday
Mm mm mm mm mm mm mm

You can catch up with the classic Beatles track by clicking here.

If you do not run an ERP that relegates spreadsheets to useful supporting tools then you are risking poor planning in your business.  If you are running an ERP you might check exactly where the data comes from and where the critical calculations are really made.

Image courtesy of artur84 at freedigitalphotos.net

Tags: Dave Jordan, CEO, Pharma, ERP/SAP, Supply Chain, Forecasting & Demand Planning

FMCG/Brewing/Pharma CEO Performance Appraisal

Posted by Dave Jordan on Wed, Oct 24, 2012

FMCG/Brewing/Pharma CEO Performance Appraisal

Name: This Couldbeyou

Location: Anywhere

Role: CEO

Sector: FMCG/Brewing/Pharmaceutical

Summary of Performance

The local economy continues to struggle in the difficult global economic climate and perhaps consequently contributed to the annual results being below expectations. However, they were so far below expectations – and your commitment - that the economic conditions cannot be the only factor. The business was growing in price and volume terms - albeit low single digit -  so there was some momentum on which to build. The anticipated shift from Traditional Trade (TT) to International Key Accounts (IKA) did not materialise and in fact company performance was lower than last year in both channels and in all categories where we are present.

Major disruption has been caused by your failure to plan the ERP implementation and post go-live ramp up in sufficient detail. Roles and responsibilities were not clear and some of our top operators were simply not led. The organisational structure remained unchanged after the new ERP go-live and this is a clear error of judgment and ignorance.

Your company has paid lip-service to Sales & Operational Planning (S&OP).  This is the agreed global approach towards operational excellence yet the regional audit revealed that S&OP was not actually on the agenda of the top team and was considered a Supply Chain problem. In times of trouble the least you should be doing is implementing global strategy on time, in full and without debate.

This leads me nicely onto in-market execution. Our brands have simply not been available in sufficient quantities when consumers are ready to make a purchase. A Customer Service Level – our measure and not the stricter retailer measure – of 90% indicates a clear failing and incompetence in the approach to Route To Market (RTM).

You inherited a slowly growing business but the past 12 months have seen volume and value drop to the level of 3 years previously and you know this is not good enough. You also know I cannot allow this negative slide to continue unabated.

Development Plan

Areas for Development:

ERPThe organisation structure needs revising urgently to ensure roles, responsibilities and skills match the requirements of the new ERP.

S&OP – Rigorously implement S&OP, ensure this is the only business process in the company and you are visibly seen to be the leader.

RTM – Understand the IKA/TT trend dynamics in detail and assess your RTM network efficiency for capability to support agreed plans.     

 

RTM and S&OP integration e-book

Own Comments

I would like to return this business to sustainable growth before moving to lead a larger operation.

Career Planning – Company View

The kindest comment I can make is “let’s not go there now”.

Appraisee: This Couldbeyou

 

Appraisor: Mr Unhappy

 

 

Tags: FMCG, Route to Market, Dave Jordan, CEO, Humour, Pharma, ERP/SAP, S&OP, RTM Assessment Tool, Brewing & Beverages

SC IT. The reality of ERP implementation and go-live preparedness

Posted by Dave Jordan on Mon, Oct 22, 2012

I am not a fan of reality TV at all. These programmes seem to promote the worst in people and you end up with “celebrities” who actually have no talent and in most cases, fewer brains. Seeking more than their usually allotted 15 minutes of fame they behave as outrageously as possible to be noticed – don’t these people have close friends to tell them the truth?

The worst version must be those talent shows where the previously never heard of “star” returns to be a judge of future celebrity wannabes. This can only result in a downwards spiral of any available real talent until you end up with an amoeba.

Keeping on theme for a moment I indulge in the kind of reality show I might actually watch and record  so I can see it all over again. What if overnight the England football and rugby union teams swapped sports and played against each other? Immediately; no training, no briefing, no knowledge of the rule book and no practice matches. Suddenly they are outside of their comfort zone and doing things they are not used to doing week in-week out.

I suspect the rugby boys would fare reasonably well at football but will probably be beaten eventually. A lot would depend on the interpretation of reasonable bodily contact by the referee. Footballers – the famous ones know who they are – are known to hit the ground as the slightest breeze blows by. The balletic grace of a professional footballer theatrically diving to win a penalty would not sit very well with a rugby team where a small, tracked farm vehicle is required to make them go to ground.

What about the other way around? Now that would be fun. The sight of a huge prop forward taking out an over paid, over hyped and over groomed soccer star would be good viewing. The lesser brained variety of soccer star would spend the entire match berating the referee that “the ball has deflated to a funny shape and that someone ruffled my hair”.

Supply Chain IT ERPThink about the chaos in the teams and the total lack of execution quality until they picked up a little more information and experience of doing something different. Think about how your business team tries to cope with a new ERP without the necessary training, hand-holding and go-live guidance. Good people are suddenly asked to work in a different roles, different ways on different IT and usually in far more time restricted operations. You cannot postpone your business until you get this sorted out and addressing it after go-live is really far too late.

You need to ensure your ERP project includes deep planning, training and preparation of all your people plus a period of intensive care provided by an expert third party. It is critical not to let the third party leave the building until you are satisfied you can play this new game yourself. Anything less and your recovery will be very slow indeed.

I avoided naming any names but in my vision of sports reality TV who would be the England football "hooker"? So many, many candidates!

Tags: Dave Jordan, Humour, Performance Improvement, ERP/SAP, Supply Chain, Integrated Business Planning

Is APO music to your Supply Chain ears.........ABBA?

Posted by Dave Jordan on Fri, Oct 05, 2012

There are many ways to link all the different planning activities in your FMCG company. This could be done with one single tool like the SAP Advanced Planning Optimiser or a host of other tools and packages.

SAP APO Small resized 600As with all IT you need to know how to use the software in order to get the best performance for your company and that is not always best provided by the IT supplier. If you need help with your consolidated planning system then Enchange is ready to assist.

In the lyrics below you can substitute the name of any IT package but APO does fit the tune well, I think.

With due reference to the original lyrics and music of ABBA.

Why why
Was our planning accurate no longer
It’s bad
And we knew we could not continue this way
Our products are not on the shelf
Poor data it speaks for itself
APO – No guessing on planning any more
APO – Now planning demand is not a chore
APO – We now know exactly what to do
APO – Smooth functioning  S&OP needs you
APO -  Finally planning with APO

We were
Using  monthly planning, but needed it longer
Oh yeah
Balancing planning right along the chain seems so right
So why did we ever refuse
It’s a win-win that we choose
APO – No guessing on planning any more
APO – Now planning demand is not a chore
APO – We now know exactly what to do
APO – Smooth functioning  S&OP needs you
APO -  Finally planning with APO

And now we see real proof
Our sales have shot through the roof
APO – No guessing on planning any more
APO – Now planning demand is not a chore
APO – We now know exactly what to do
APO – Smooth functioning  S&OP needs you
APO -  Finally planning with APO

Tags: Dave Jordan, Humour, ERP/SAP, Supply Chain, S&OP, Forecasting & Demand Planning

Global Supply Chains: Reliance on ERP data quality & accuracy

Posted by Dave Jordan on Tue, Feb 28, 2012

Everyone in multi-national companies will have experienced the “data request from head office”. Usually arriving at the most inconvenient time, with unclear instructions and no clear reason-why! These data collection campaigns are often managed by the latest rising star in the business and as soon as they move onwards and upwards someone else steps in and repeats the process! Frustrating!

Information ManagementHowever, companies who have invested in globally linked ERPs should not need to use the “rising star” process as HQ will be able to see everything and anywhere on the same network. Units of measure will be consistent as will calculation of S&OP KPI’s and financial measures. Add a currency conversion standard and you can collate global data with a high degree of speed and accuracy. What can happen when you are not using a common ERP? This could mean nothing at all or perhaps the worst case scenarios of a mix of multiple unrelated ERPs AND nothing at all!

A recent project involved collecting data from the regional offices of a global company. Each location was provided with a customised Excel-based data collection sheet and a set of instructions for completion. A selection of what came back?

  • Nothing
  • A screen shot from an ERP
  • A completely different data file
  • An S&OP data file
  • An annual budget submission
  • Partial completion with good data
  • Partial completion but with errors
  • Full completion with good data

Full completion with errors

Perfection was not anticipated – that could even be classed as suspicious - but the variety and quality of responses was unexpected. This was a company striving to make tough global decisions at the top table which could not assimilate coherent information. Repeated prompting and chasing only added to the data fog as data was contradicted or revised or over-written.

I am not suggesting everyone should invest in a 3-letter Germanic ERP system but some degree of consistency is necessary if you want to understand your status quo and measure the success of improvement initiatives and make decisions on global priorities. You need to remove the inevitable reluctance of employees with assets and jobs potentially under review to provide 100% unambiguous and accurate data. I am not a great fan of Excel solutions but in the absence of anything else it can be a useful tool in forcing decentralised teams to provide clean, accurate and actionable data. Such data can then be maintained in a centralised and secure data warehouse but this has to be managed……..

Data consistency and accuracy is paramount for global and regional ERPs to work and start repaying the investment cash but data management is usually foggy at best. Strangely, companies seem to avoid the importance of data until a wide-ranging ERP is on the horizon and then there is a last minute rush to appoint a Data Manager and team to ensure data used in the business actually reflects reality. Such a role might not appear “sexy” but it is one of the most important roles in any company intending to run a coherent global business. Grade the role appropriately and appoint a “data Rottweiler”!

If you’re not serious with data it comes back to bite you sooner or later!

Tags: FMCG, Dave Jordan, Performance Improvement, ERP/SAP, Supply Chain, S&OP

Supply Chain Visibility; Planning for IKA Customers

Posted by Dave Jordan on Thu, Feb 02, 2012

I came across an interesting problem on FMCG planning this week. The company in question was a blue- chip multi-national with well developed supply chain and business processes, e.g. a suite of relevant and stretching KPIs in place plus a living Sales & Operational Planning (S&OP) process. Marketing had even chipped in with an innovation and promotional plan for the following 12 months.

Sales had been dragged kicking and screaming to the S&OP table and had started to forecast sensibly, i.e. not just by brand or by geography but by sku and by customer/channel. If you provide a detailed forecast with sufficient horizon but stock is not available then SC Planning has to improve. Or does it?

Still, the familiar calls of a sales team complaining about “not delivered” and “lost IKA sales” were reverberating around the office. A perplexed SC team studied the KPIs, checked the ERP and discovered that for some major lines the sales were well over forecast. In most organisations a band of +/- 20% is typical but when the bias is consistently above forecast there is a problem to be solved. SC was aware of all the promotional activity and there were no new launches in the period yet key skus were running out of stock.

Open on the desk was a copy of the in-house promotional magazine for the IKA retailer. Flicking through revealed the likely reason for the bias and “lost sales”. The sales department and the retailer itself were organizing promotions and selling activity which was not on the SC radar yet drew from the same planned stocks. Attractive promotions and bulk buying offers on major skus inevitably led to shortages.SC VisibilityConversely, some in-store activity, e.g. promoting out stocks close to their sell-by date meant other skus were sold well below forecast which posed problems within the logistics network.

Do not take the “lost sales” complaint as the final word. From time to time check out the retailer magazines and see what is happening behind your back!

Tags: FMCG, Dave Jordan, ERP/SAP, S&OP, Forecasting & Demand Planning, Logistics Management

FMCG Planning: a short history of technology advancement

Posted by Dave Jordan on Wed, Jan 25, 2012

All major companies run some sort of ERP to support their business whether they are FMCG, pharma, brewing or indeed anyone who “makes stuff”.  Many blue-chips have invested in big name software packages while others have gone for a cheap and cheerful locally built product. The big name offering is not always the most user friendly solution but then the made-to-measure option also has drawbacks, usually support and lack of flexibility. Anyway, getting to the point….

A discussion this week on supply chain planning had me thinking about how planning used to be done, Yes, ok go on, cue Mary Hopkin singing Those Were The Days – all young things should look  it up on YouTube.

Production Plan SmallI guess at some stage before type-writers the planning process must have been largely verbal with some lowly paid scribe scratching away with a quill on paper taking down orders from salesmen.  Manual addition would follow until a demand for raw and packaging materials was derived. After typing on corporate headed paper and receiving the company seal the various orders would be sealed in envelopes and posted. What sort of lead time would that process have offered? What on earth happened if there was to be a change or there was an error in the writing or – just a possibility – the sales department got the forecast wrong?

Typewriters will have improved the process a little but reliance on post would be the norm until the possibility of Telex popped up. This was still heavily reliant on manual intervention and of course the planning process itself remained rudimentary and paper based.

Communications eased with the arrival of the fax machine. At least now the lead time between order issue and receipt was a matter of minutes and changes could be made without waiting for the postman to call. Different departments could exchange information as long as a telephone line was available. Still, the task of finding and collating data would remain in the relative dark ages despite the arrival of table-sized calculators.

The computer arrives and provides a massive step forward. Now there was a bit of IT to support the number crunching process and make the order process far slicker.  Software to take account of history, market activities and launches facilitated business forecasting – not necessarily more accuracy, however.

Move ahead only a few more years and we have suppliers, producers and customers fully integrated with common IT, processes and data. Collaborative planning gets partners proactively working together for a common goal rather than being defensive and protective of their individual silos. Producers can see when a consumer buys their product at what time in which store and at what price – they probably know their names via the loyalty card scheme too! Salesmen know when shelves are empty and can send orders in real time from hand-held devices.

Technological innovation has brought planning a long way since the 1800’s and there is undoubtedly more to come. I wonder what is next.  So, while you tap away at your ERP interface spare a thought for how planning was carried out at times when a PC was a London Bobby, having a Wii in your living room was unacceptable and an iPad was still just a typing error. Start singing Mary.

Tags: Dave Jordan, ERP/SAP, S&OP, Forecasting & Demand Planning, Integrated Business Planning

Top 10 Supply Chain New Year Resolutions: Making Progress?

Posted by Dave Jordan on Tue, Apr 19, 2011

So, we have reached April and Q1 is already done and dusted; how were your results? Be honest, did you push, push, push to make last year’s final number and shoot yourself in the foot for Q1? From what I understand very few companies will have had a comfortable end to the quarter. Whatever business you are in e.g. FMCG, drink, pharma, the markets remain very difficult.

Supply Chain New Year's ResolutionsDid you make any Supply Chain resolutions? If you did you may already have broken them but let us recap at those I suggested towards the end of last year. There might still be time to maximise the effectiveness of your extended supply chain and have a storming end to the year!

  1. Supply Chain Awareness – this one is not time dependent so do this at any time and you will achieve a greater SC understanding around the business.
  2. Sales &Operational Planning –the principles of S&OP are designed to prevent “offline” or stock-loading decisions and this may well be the process to avoid a repeat of the year-end push. If you do not operate a robust planning process then you might consider implementing S&OP. Sooner or later all your competitors will be operating at least something similar and you will be left behind with negative growth when the markets warm again.
  3. SKU Complexity – this really is a no brainer and again, not time dependant. If you have limited resources and financial budgets then you need to ensure you are backing the most profitable skus. Filter out those skus which really do not add any value – you will have some.
  4. Route To Market – if you are in a business heavily influenced by the weather , e.g, drinks, ice cream, DIY then now is the time to stand back and see exactly how well your network is equipped. Once the world’s greatest salesman is shining bright it is too late for the year. The summer period will make or break those weather sensitive businesses and there is simply no opportunity to play catch-up.
  5. Sales & Marketing Buy-in – in parallel with the SC Awareness resolution this could actually make difference. Once people understand how their decisions affect the rest of the company they may actually join the team rather than sit outside sniping!
  6. Proactive 3PLP’s – have you met them recently to review performance? Did you meet at the appropriate level in the organisation? 3PLPs require constant attention and monitoring. Failing to give your 3PLP sufficient surveillance will have a direct and immediate impact on your business performance.
  7. Reduced Stocks – unsuccessful promo packs still gathering dust? That blockbuster new product launch that did not meet aspirations is still in the racks? Look at your stock levels on a regular basis and keep your chain lean.
  8. Improved Customer Service – ultimately the measure by which you can gauge and improve your business performance. If you do not know your CS Level on a daily basis by sku then you are not in control of your destiny.
  9. Use the ERP – this one keeps coming back as an issue for major companies who have invested heavily in big-name ERPs.  While they certainly have a role to play the use of a “shadow spreadsheet ERP” is damaging.
  10. Continuously Improve – keep innovating and improving your Supply Chain. Don’t be afraid of new initiatives like retailer platforms; work with retailers to erase the problems and produce big win-wins!

Yes, there really is still time to change your business performance by getting improved value from your Supply Chain and it is not rocket science.

Tags: Customer service, SKU, FMCG, Route to Market, Dave Jordan, Pharma, ERP/SAP, S&OP, Logistics Management, Distribution

What has S&OP ever done for us? The role of the CEO

Posted by Michael Thompson on Tue, Jan 04, 2011

What has S&OP ever done for us?We have started a debate about S&OP - “What has S&OP ever done for us?”.  Our protagonists are REGINALD, the CEO of a multinational FMCG company and JACEK the new Head of Supply Chain Development at the same company.  Both do not believe that S&OP is really necessary but for different reasons.  MIKE (myself) is the Moderator.

I would like to Welcome Anne to the debate.  Anne is the CEO of a multinational brewing group and has her own S&OP experience.

MIKE (MODERATOR): I would like to welcome Anne to our debate. First let me start with a recap.  Reginald does not believe that S&OP is really necessary as it hasn’t produced any tangible benefits to date.  Jacek shares the same view but for a more technical reason - companies without S&OP are more flexible in their supply chain planning and can respond quickly to customer demand.  Implicit in Jacek’s view is that such companies have an integrated ERP system, well defined supply chain processes including responsiveness to order capture, and people capable of using them.  Is that a good summary?

JACEK (Head SC Dev): Yes, it’s not quite as simple as that but ... 

REGINALD (CEO): but Jacek has described an ideal world with no regard to local disagreements between departments ...

MIKE (MODERATOR): OK, but in summary have I captured your views?

JACEK (Head SC Dev): Yes

REGINALD (CEO): Yes

MIKE (MODERATOR): OK let’s continue.  I would like to invite Anne to share some of her experience with S&OP.  Anne has read the blogs.  Anne?

ANNE (CEO): Thank you.  Well I am afraid that I disagree with Reginald & Jacek.  In my experience S&OP has proved invaluable in running a business.  And whilst I agree in most part with Jacek’s technical analysis, I believe that S&OP can successfully coexist with an integrated supply chain. 

REGINALD (CEO): Invaluable?  Well it hasn’t done much for our organisation so far.

ANNE (CEO): Let me ask a question Reginald.  I read about your annual meeting.  What do other people think of S&OP at your company?

REGINALD (CEO): Views vary.  Some like it. Some don’t.

ANNE (CEO): And what do they think about the bosses view about S&OP?

REGINALD (CEO): I run an open company.  People know about my scepticism.

ANNE (CEO): And how often do you attend the S&OP meeting?

REGINALD (CEO): I believe in delegation. The S&OP meeting is run by our Supply Chain Director.  And to answer your question, I attend occasionally.

ANNE (CEO): With respect, Reginald, I believe that is one of the reasons that S&OP is not working for you.  S&OP is not just about supply chain.  It is about the entire business.  For example, you cannot ask the Head of Supply Chain to chair a debate between Sales and the factory about how much we planned to sell and how long we will be out of stock on certain SKUs.

REGINALD (CEO): Debate? All out war if last month is anything to go by.

ANNE (CEO): Precisely. And during the last war, what did you do?

REGINALD (CEO): Called an emergency meeting & knocked heads together.

ANNE (CEO): Attended by whom?

REGINALD (CEO): Sales Director, Supply Chain Director, Head of Planning, Head of Forecasting.  And a few others with laptops.

ANNE (CEO): And there was an argument about the forecast being inaccurate, too much stock of some SKUs & not enough of others ....

REGINALD (CEO): And the rest. And it was the same the month before last.

ANNE (CEO): What you probably had was an escalated version of a pre-S&OP meeting.  And I’ll bet that you came to some kind of agreement in the end after “heads were knocked together”.

REGINALD (CEO): Well yes. We did. But it happens every other month ...

JACEK (Head SC Dev): That’s because our processes are wrong and not aligned to our ERP system ...

ANNE (CEO): And it’s also because S&OP is not respected in your organisation.

REGINALD (CEO): What do you mean respected?

ANNE (CEO): You cannot expect S&OP to be taken seriously in your company if you do not take it seriously.  And taking it seriously includes chairing the S&OP meeting ...

REGINALD (CEO): Chairing?

ANNE (CEO): Yes chairing. And chairing every meeting. You are the boss.  Sales and costs are ultimately your responsibility.  S&OP is about optimising cost and service within the business.  The buck stops with you.

REGINALD (CEO): And what about all of this so called Integrated Supply Chain Planning? Where does that fit in?

JACEK (Head SC Dev):  The standard S&OP approach does not use or even ‘tolerate’ the dynamic, ‘fresh’ incoming data from order capture, for example, that promotes supply chain responsiveness within integrated supply chain planning .... 

MIKE (MODERATOR):Jacek, the technicalities please ....

ANNE (CEO): I have read what Jacek had to say & believe that he makes a series of very good points.  If you have a new ERP system, then use it properly.  It sounds like you need to redesign your supply chain planning processes.  Once that is done and people are trained – I include your customers and suppliers here - integrated supply chain planning and S&OP can go hand in hand.  As the processes starts to work properly and ERP begins to deliver what it is designed to deliver, the nature of S&OP will change. 

REGINALD (CEO): S&OP will change? How?

ANNE (CEO):  Yes S&OP will change. It will probably need to be highly structured and disciplined to start with.  Then as the process and systems begin to deliver and people start to believe in the information being produced, the S&OP process can become less rigid.  Eventually it may even serve as an operational and supply chain review and improvement forum.

ANNE (CEO): In any event, it sounds like you need to start off with a relaunch of S&OP. You need to reassert your operational authority on the business. S&OP can be just the platform you need.

SILENCE .....

MIKE (MODERATOR): Is that the silence of acceptance?

REGINALD (CEO): No. It is the silence of me thinking.

JACEK (Head SC Dev): And me.

REGINALD (CEO): Does that mean that if I go to S&OP meetings, everything will eventually be all right?

ANNE (CEO): Of course not. But leading, really leading an S&OP process is a good start for any CEO.

JACEK (Head SC Dev): I still think that S&OP can get in the way.

ANNE (CEO): But Jacek, have you ever seen it work in the way that I have described?  That is in a ‘light touch’ consensus process that supports supply chain and operational processes and that is supported by ERP?

JACEK (Head SC Dev):  And I thought that I was dreaming.

MIKE (MODERATOR): That’s it for now folks. Thank you.

What are your thoughts? 

As I mentioned in a previous blog, this series is based on nearly 20 years of supply chain experience as a consultant who has witnessed similar debates. My view? Call me Anne?

I’d welcome experience from other people.

 

In this series:


      Tags: Michael Thompson, ERP/SAP, S&OP, Forecasting & Demand Planning, Integrated Business Planning