Supply Chain Blog

How Spreadsheets Undermine Your FMCG ERP

Posted by Dave Jordan on Mon, Jun 11, 2018

Despite what you may wish to believe the answer is probably, yes. You have invested heavily in brand new ERP software and similarly heavily in some smart, young consultancy people to run the implementation. You will have spent some timing debating and making these choices as the change to an all encompassing and integrated ERP is a huge step and at the same time a huge risk for your company.

Suddenly the flexibility to back-date or correct entries is lost or at least there is a rigid and auditable procedure to follow in order to make any adjustments. Sudden uplifts in Sales cannot be slipped in unnoticed at month-end and neither can supply shortages or marketing tardiness with promotional activity. Everything you do in a good ERP is recorded and can be seen.

ERP System ImplementationIf your ERP really is the only software being used to run your business then a hearty well done to you. However, in a surprisingly large number of companies the all important role of change management has not received the required seniority or focus.  Staff who have been using spreadsheets for maybe 10 - 15 years (it was released in 1985!) cannot and will not stop using them just because they have been trained in a new ERP.  Spreadsheets are like a cuddly teddy at bedtime; they are familiar, comforting, not demanding and always there!

An element of your decision to implement a new ERP was probably a supplier guarantee that people productivity and data accuracy would be improved. In reality you will find staff operating a covert shadow ERP on the same old spreadsheets. Detailed planning, sales and allocation decisions are being made on spreadsheets and then manually inserted into ERPs. Commonly, decisions are taken in isolation of S&OP and lack the consistency that ERP master data brings plus the all important history development for the business baseline.

Staff efficiency and data accuracy have certainly not improved; they have worsened. The tedious “cut and paste” of data into the ERP is time consuming and fraught with error. Post ERP implementation is always a rough time for businesses  as they get to grips with a new way of working but is it any wonder some stay in a continual state of intensive care?

If you pay sufficient attention to change management you can lessen the impact. Should staff not see the medium terms benefits outweighing the short term inconvenience then they will operate the shadow ERP.  The change manager has to clearly show what the ERP brings to people first and subsequently the company – not the other way around.

Of course, one solution might be to deactivate the spread sheet program on the network until ERP discipline is second nature? Now, who is brave enough to do that?

Image courtesy of HikingArtist

Tags: FMCG, Dave Jordan, Pharma, ERP/SAP, Supply Chain Analytics, Integrated Business Planning, ERP

FMCG Supply Chain dates to remember: Advanced Planning

Posted by Dave Jordan on Wed, Jan 31, 2018

February is here but blink and you will miss it as it is not a leap year. You cannot change January performance and February should be quite firm by now, so you need to be looking further ahead in your S&OP. Much further ahead.

What is coming soon in the wonderful world of FMCG and others?

Valentine’s Day 14th February. Yes, I know it is cheesy, but it is a prime time for chocolates and greetings cards and if your stock is not in place already, don’t bother. I can still see discounted Christmas chocolate on the shelves and I am sure the same will be true after the big red heart day.

Spring. An important period particularly in eastern Europe where a thorough house cleaning is the order of the day. Surfaces and fabrics are thoroughly cleaned and presents an opportunity for homecare producers to get an early boost in sales.

Easter April 1st. A huge confectionery event and fairy early in the year so you get to nibble nice, crisp chocolate rather than warmish stuff – ugh! Take care though because as mentioned above, you will probably be discounting your stock for several weeks after the event. Perfect for chocolate lovers but not great for retailers, your profit or core SKU brand planning.

Orthodox Easter 8th April. Usually a more religious and less chocolatey event but increasingly becoming like the earlier Easter. The dates are very close to each other this year, so this should not cause any significant planning and distribution challenges for global and regional producers. If you are slick enough you could transfer any obvious excess from the April 1st event into Orthodox markets, labelling permitted of course.

Eid al-Fitr. Mid-June. The holiday marking the end of the fasting month of Ramadan. A huge, huge surge in the demand for food and drink across several work-free days. If food and drink producers in Middle East and North Africa get their planning wrong during Ramadan and the following Eid, then the annual results are immediately in danger.

FMCG_PLANNING_ADVANCED_S&OP_DAVE_JORDAN.jpgSummer. While some events are fixed and in the diary years in advance, the appearance of the sun in the northern hemisphere remains unpredictable. This is an annual nightmare for drinks and ice cream producers as despite all the algorithms and predictive tools demand is difficult to guage, in Europe at least. In the hotter months the key aim must be for your key SKUs to be available 100% of the time. This may lead to future write-offs but if the sun pops out and your products don’t…….. 

Eid al-Adha late August. Another Islamic celebration which is perhaps not as grand as Ramadan Eid but as it is in August this year you can be sure chilled liquids will be in high demand. Unike in Europe, the sun is not shy in shining brightly in the ME and NA regions.

Back to school September. Paper, pens, pencils and Peppa Pig lunch boxes will fly off the shelves in preparation for the new school year. Look at the major retailers and you will see a very wide choice and surely not everything is sold. In fact, I remember seeing a huge stock of Bob the Builder merchandise on sale in rural markets in Uganda one Christmas. You have to get rid of it somewhere!

Thanksgiving 22nd November. A mainly North American food fest but with similar celebrations in Netherlands, surprisingly. Large family feasts and open-house entertaining ensure a peak for foods and drink manufacturers.

Christmas. Not much to say here except sales of everything in FMCG-land and many others reach a crescendo of demand as December progresses.

There are many other important peak seasons which may be global, continent-wide, regional or very local but all of them must be considered in your forward planning. If you don’t get it right someone else will push their products in front of consumer's faces.

If you want to be successful, then all these events and more should already be in your 2019 planning process. No typo there, yes 2019! Rather like driving a car on a long motorway, the further you are able to look ahead the easier it is to deal with unexpected hazards.

Image courtesy of Supertrooper at

Tags: FMCG, Dave Jordan, S&OP, Forecasting & Demand Planning, Integrated Business Planning

FMCG Trade Loading & 4th Quarter Challenges - deja vue all over again!

Posted by Dave Jordan on Mon, Nov 27, 2017

Some things never change and FMCG 4th Quarter challenges certainly do not. The same challenges are clearly present and what is astonishing is that some companies are still making short term, expensive efforts to “make the sales numbers”. I don't think that is very clever; instead of pouring cash into a black hole without guaranteed return why not divert resources to sort out the underlying problems? They will not go away on their own!

There is a little bit of growth in the market but those green shoots are still relatively puny. Assuming growth is to return, those companies that had the vision to be critical of how they do business in difficult times will be the winners. All the others will be achieving the numbers by loading the trade….again and again.

You should have a good feeling for how things have gone in Q3 and what is still needed in Q4 to reach the numbers you committed to over 12 months ago. "Committed" may well be the wrong word as you were probably forced/cajoled/persuaded to accept figures you knew would be difficult if not nigh impossible to achieve. However, for the greater corporate good you took it on the chin and said “yes, we will do it” (no idea how but cést la vie).

Exactly how are you going to achieve those seemingly distant numbers? The corporate world remains in trouble but so are consumers. The two groups are not disconnected; consumers are having a very tough time considering the increasingly clueless government austerity measures that continue to drip out around the globe. Consumers simply do not have the money to prop up your annual plan and what money they do have is likely to be rationed to be sure of a reasonably happy Christmas. Remember, consumers owe you nothing, not a penny!

One thing you may consider if sales are not going well is to fall into the trap of month-end loading. Let us consider this scenario which is far from uncommon even in “blue-chip” companies. Let us assume October sales are poor in the first 2 weeks and then the word is given to “push” stocks into the trade. Discounts are given, favours called in and hey presto, the required target number is achieved and you and your bosses think you are back on tSupply_chain_sales_planning_results.jpgrack.

You have pushed so much stock into the trade that distributors are short of cash and International Key Accounts platforms are overstocked. Consumers do not drink more beer or wash their hair more often or eat extra snacks because you sold at a discount. They have taken advantage of your offers and have filled their own domestic warehouses ready for Christmas and possibly beyond.

Then we get to November. This time sales are poor into the third week and the rallying call of the stock push does not seem to be working. Support  and discretionary spend budgets are raided again and yet more stock is forced into places where it has no demand. Despite this, the motivation of achieving targets and securing a bonus ensure that the right number is flashed to HQ at the end of the month.

Now just December to get through……even if it is really only a 16/17 day month for selling. You are so close that a few more discounts and the promotion of high value SKUs means you close the year on target. It’s that champagne moment, get the fat cigars out!!!!

Sit down and think about what you have just done for the sake of a slap on the back and a bonus. You have turned the operation of the company upside down, contravened numerous policies, abused S&OP (if you use it) and unfairly stretched your staff in all departments. 

If you are brutally honest you will know you have sold January’s demand over the last quarter the year. You will not get away with that for long as it will come back to bite you eventually!

With stretched resources it is difficult for companies to see what is really happening across all departments and how decisions in one area cause a detrimental effect in another. If you insist on chasing the full year numbers/bonus then you might at least take on some professional support and understand the damage you are causing to yourself.

Image courtesy of Stuart Miles at


Tags: FMCG, Dave Jordan, CEO, Performance Improvement, S&OP, Forecasting & Demand Planning, Sales, Distribution, Integrated Business Planning

Fashion Retailers: Is inventory eating into your profits? (It is…)

Posted by Dave Jordan on Wed, Aug 31, 2016

I touched on the problem of expanding UK waistlines a few blogs ago and the topic popped up again recently when I was out and about shopping for clothes – no, not me. This is not as regular an event as it may be for senior management but due to the imminent arrival of a few dry and summery days, I was in need of new shorts and T-shirts.

Nothing special or posy, just bog-standard items that do not have some sort of advertising logo blazoned across for which I receive no payment.  Similarly, I was keen to avoid those that look like someone has been assaulted by an ultimate, all-topping, deep-pan, soft-cheese pizza. Oh, and no fashionable rips and tears, either. Plain and simple and in one “quiet” colour; that’s me.

Fashion_retail_inventory_supply_chain_analytics.jpgIf I look at the internet – it’s all true there isn’t it? – then I am about the top end of average as long as it is not Christmas, Easter or holiday time. As everyone knows, bathroom scales do not work accurately during those periods and clothes shopping then is silly anyway. There started my rare shop for T-shirts and shorts in the medium/large size range. Should be relatively simple I thought as I started to dodge the bodies of the newly pedestrianised high street throng.

Alas, no BHS, no Austin Reed and now not even an Old Guys Rule to replenish my summer wardrobe but plenty of retail options remained. With a spring in my step I activated the soft hiss of the sliding doors and there I was in one of the largest clothes retailers in the game. No names mentioned in case it jinxes the chain and we lose another big name!

The choice in style and colour was good and the racks were very well stocked with lines and lines of T-shirts and shorts. Then the problem hit me. Although I was looking for M or L sizes the only items available were extra small, small, extra-large, XXL and even XXXL! (Don’t get me started on why extra small and XXXL must be the same price.) This was not an isolated case and after checking I realised this was true for the gaudy coloured stuff and the “stylish” pre-damaged items. What is going on?

This may only be a sample of 1 but this major UK chain with several international franchise locations is probably operating with several hundred thousands of Euros hanging on racks with only a small chance of being sold anytime soon. Sizes which fit a large proportion of the population are out of stock (OOS) presenting a huge lost sales problem. And it is not just T-shirts and shorts; have a look at hugely expensive suits, coats and shoes. The same may also be true of the ladies’ fashions but I decided against browsing those racks.

In FMCG, if your Heinz beans are OOS then you pick up HP or an own label offering in the same outlet and it does not really impact on the retailer or the consumer. Not so in clothing retail where alternative options are dotted around the adjacent shopping centres. Seeing multiple Mr. Averages walk out of your store due to OOS while a host of other sizes hang around is just plain daft.

How long does that working capital flap about in the stores eating into your profits? Inevitably, the seasons change and with that the styles adjust. New designs and new ranges are introduced but where do you put them? Eventually, to create space you have to withdraw the S/XXXL stock and either marginally discount it internally or more heavily with a third party.

The problem is not only about having too few top sellers but also about how you plan for the success of the entire size range and avoid over-stocking profit guzzlers. Nobody has a functioning crystal ball but you can apply some clever supply chain analytics to ensure your store inventory is designed for success and not for failure.

Image courtesy of mapichai at

Tags: CEO, Inventory Management & Stock Control, Supply Chain Analytics, Integrated Business Planning, Retail

FMCG Supply Chains: Searching for the next “big thing” – it’s here!

Posted by Dave Jordan on Wed, Jul 27, 2016

I had an informal discussion with a small group of FMCG Supply Chain VP/Directors last week. I well remember the occasion as it was the day UK had its annual summer but the discussion was memorable for more than that fact. After rushing back to base in the inevitable evening rain with my briefcase as the only shelter I wrote out some notes from the session and they worried me.

Supply chains have moved on a long way from the early days when bits and pieces from other usually incongruous functions were glued together to form a nascent coherent function. I cannot list the huge number of initiatives that have taken place in the intervening years but some global supply chains are so slick that even sales people are almost impressed! Not all new ideas resulted in sustainable changes but some of the more obvious candidates like S&OP, corporate buying, ERP deployment and 3PLP partnerships have more than earned a return on the investment.

Unfortunately, you cannot stand still and supply chains everywhere are continuing to eke out incremental improvements in some of the more mature cases or substantial step changes in those less developed. Some companies clearly have plenty of scope for improvement but what about those who are at the top end of the Gartner Oscars list?

Is there anything left for Supply Chain VPs and Directors to achieve? Has all the cutting edge, innovative stuff happened? Are there really no more storming, monster initiatives coming over the hill? Is this as good as supply chain is going to get?

Talking of monsters, let me go back to the senior group discussion I mentioned at the top of the page.  S&OP and its younger sibling Integrated Business Planning have stabilised virtually all of the major multinational supply chains. Bringing a degree of discipline across all functions and a smaller improvement in sales forecast credibility has helped companies squeeze positives in top and bottom line performance.

Heavy investment inFMCG_Supply_chain_analytics_inventory_stock.jpg ERP upgrades have added a degree of financial rigour and reliability to businesses although the underlying thought is that even now, nobody really gets value for money from those slick and shiny IT packages.

I can imagine all these hungry supply chain executives searching for something that can make a lasting difference. You know what? They are standing there while it’s raining soup but they’ve all got forks!

The one area which has been largely untouched by the various supply chain initiatives and IT tools is inventory. Boring, boring stock levels; the planning manager’s crutch, the sales manager’s obsession, the working capital bane of management finance managers lives.

You may argue your stock is under control. The level is the right number of weeks cover. The value is at or below the annual plan targets. Even the number of pallet spaces is on track at the 3PLP warehouse. All highly likely but are those stock levels really supporting the business or simply just propping it up? 

Look carefully and I think you will find it is the latter. Inventory will not be aligned with precise market activation and selling out plans and is therefore stifling rather than facilitating growth. All the numbers may apparently support the business objectives but look closely and you are likely to find very little science in how forward stock cover is defined and specifically by SKU.

There is a solution. A sensible low cost solution that works and tellingly, it has been designed by supply chain experts for supply chain people!

Put your forks away and read about SupplyVue supply chain analytics. This works!

Image courtesy of Ohmega1982 at

Tags: FMCG, S&OP, Inventory Management & Stock Control, Supply Chain Analytics, Integrated Business Planning

2 issues to address before you can optimise inventory.

Posted by Michael Thompson on Wed, Nov 25, 2015

Inventory_optimisation_issues_fmcg.jpgIn my last post I dealt with the long-standing issue of inventory optimisation and some of the reasons that many organisations are still struggling with it. If it was just left to a technical challenge, optimising an organisation’s inventory, whilst never straight forward, would at least be doable to an extent.  However, we are dealing with people in organisations; often many people and each person has an opinion, an ego and a career to protect and progress. In working on supply chains for well over 20 years, I have found that many of these people issues can get in the way of sorting things out and this includes with respect to inventory optimisation. So here is my recipe for the two that must be addressed before any organisation can optimise its inventory. 

  • Cut out the blame.  Nothing quite lends itself to blaming others than the causes or perceived causes of poor inventory management - too much, too little (stock outs), never the right amount to satisfy anyone. Whether it is supply chain management ("if only we had a decent sales forecast"), sales management ("why can't the planners give us enough stock?"), purchasing management ("we should order more or we will be blamed again when the stock runs out") …. and so forth.  A decent Sales & Operational Planning (S&OP) process can cut through a lot of the blame culture but sometimes this is only a start. Something else is needed.
  • Stick to the facts.  I have found that the single most effective way to cut out blame is to stick to the facts. At its most basic every supply chain management team (or S&OP Team) needs a decent set of supply chain KPIs or metrics. These can change an emotional exchange (at a pre-S&OP meeting for example) into an objective decision making process.

Sometimes, however, we need something more. If it was just down to a decent S&OP process supported by KPIs, inventory optimisation would be much easier than it is in practice. This something else, I have found, can be a deeper and more thorough analysis, sometimes referred to as supply chain analytics.  I will deal with this in my next blog with a real example. In the meantime, please do share your organisation’s inventory story.

Image courtesy of Ambro at

Tags: Michael Thompson, Inventory Management & Stock Control, Supply Chain Analytics, Integrated Business Planning

3 reasons why multinationals are still struggling with inventory

Posted by Michael Thompson on Wed, Nov 18, 2015
Last week I had another chat with a client about inventory.The essence of the client's problem was - "Why can't we get our stock right?  We either have too much …. or run out … and we have just spent a fortune on a new IT system …."

Sound familiar? I have had variations of the same discussion dozens of time and it boils down to this for most manufacturing-based organisations:

  • Inventory_stocklevel_supply_chain_question.jpgDo they know the ideal level of inventory that will deliver their target service levels?
  • Do they know what needs to be changed to achieve these targets?
  • Do they really understand what is actually happening with their supply chain? 
If they are honest, often the answer to at least one of these is "no". In the last 10 years or so, despite investments in sophisticated systems, there are still huge opportunities to improve supply chain performance, particularly for large global supply chains. Why is this? I believe that there are three reasons:  
  1. Poor Diagnosis.  In efforts, often motivated by internal politics and attempts to apportion blame, there is an incorrect diagnosis of poor performance.  Root cause is not always if ever addressed.  For example, the forecast is often blamed - “if only we had a decent forecast …”. In reality the issue often lies within the supply chain processes, incorrect supply chain policy, the set-up of the IT systems or how the tools are being used.
  2. Complexity.  Managing supply chain complexity, especially for multinational organisations, is a real challenge.  Many operate in 100’s of markets around the world, have a factory footprint of dozens of factories, 100’s of warehouses and serve 100’s or 1000’s of direct customers.  To protect themselves, supply chain managers in these businesses are buffering supply chains with inventory and lead-times.
  3. Complex IT Projects.  Often large IT projects (e.g. SAP/APO upgrades) automate traditional ways of working.  This can result in little improvement or sometimes things are made worse with increased noise and nervousness in the planning processes.

So what is the solution? I believe that before a ‘technical solution’ can be found (and there is always a technical solution), certain internal issues need to be addressed. I will deal with these in my next blog. 

In the meantime, please do share your organisation’s inventory story.

Image courtesy of niamwhan at



Tags: Michael Thompson, Inventory Management & Stock Control, Supply Chain Analytics, Integrated Business Planning

FMCG IBP Team Behaviours: Wrecking Market Deployment

Posted by Dave Jordan on Wed, Oct 28, 2015
Over several years I have been involved in many Integrated Business Planning (IBP) meetings as a facilitator, observer or participant. Every IBP process is rightly different in every company and sector, e.g. FMCG, Pharma, Agri but the basics essentially remain the same.
  • IBP is a collaborative cross functional process that engages all functions to produce an integrated set of plans that all are committed to support.
  • The purpose is to balance demand & supply in the extended supply chain.
  • IBP is performed periodically – monthly or weekly cycles.
  • IBP aligns operational plans to high level business & strategic plans.
  • IBP can be implemented at a market, regional or global level.
  • At its core is a single set of numbers for the entire business.
  • IBP uses standardised processes, calendars of events & meetings, data and information requirements plus Key Performance Indicators.

Some meetings in the IBP cycle are deadly serious affairs with strong and controlling leadership while others are jollier with team members encouraged to throw in the odd guffaw in support of team bonding and morale. I personally prefer the latter as you tend to see far less use of damaging WMD – Wrecking Market Deployment – ordnance (yes, check the spelling if you must!).

What sort of morale, process and performance wrecking ordnance can be seen in the worst examples of an IBP process? Here is a selection:

Delayed Action Information Grenade – usually deployed after 20.00 on the evening before an important IBP meeting. Deliberately timed to provide no opportunity for debate or analysis before the information is revealed to the wider team. Usually aimed into a neighbouring silo and accompanied by the defensive “but I sent you an email” and much useless debate.

Blame Thrower – As the name suggests this weapon indiscriminately apportions blame to anybody but the person delivering the accusations. The usual outcome is that the deliverer is really the one to blame and this tactic is used to divert attention from their own failings.

Bouncing Bomb – This is deployed far in advance of the meeting with the full awareness that a problem is coming and the knowledge that this will explode much further down the process when it causes maximum disruption to the business.

Err to Err Missile – A lethal weapon which fails to correct known faults within the process and sees them repeated time after time. Eventually the error, whether data or behaviour, can become embedded thus consistently undermining performance.

UxB or Unexpended Budget - a passive weapon brought to the table by Sales and Marketing colleagues. Plans built on a certain level of market support have no chance of success when budgets are cut after business planning decisions have been made. Usually results in excess stock, lost sales and ultimately, write offs.

Unclear Bomb – Perhaps the most terrifying weapon of all and although deadly it is in frequent use in FMCG, Pharmaceutical and Agri IBP processes. This bomb is commonly deployed when participants have not adequately prepared for their part in an IBP meeting. A lack of clarity in data interpretation and the resulting information undermines the process and in-market performance.

There are many more weapons able to cause mayhem and disruption in IBP processes and they are used by all involved departments. Success comes only when the weapons are permanently decommissioned and people start to “prove people right” rather than work hard to prove them wrong.

Image courtesy of Ambro at

Tags: FMCG, Dave Jordan, Pharma, S&OP, Agrochemicals, Integrated Business Planning

FMCG: Driving success through Integrated Business Planning (IBP)

Posted by Dave Jordan on Wed, Sep 30, 2015

The sun is shining high in the sky and you are driving your Volkswagen Golf Cabriolet 2.0 TDi with the top down on a six lane highway. There is a long drive ahead for you and your three friends but with this car on this road things should turn out fine. The only emissions you are bothered about are coming from the quadrophonic surround-sound speaker system.You can see far ahead down the highway into the distance in the direction of your objective. You can see all the potential hazards in good time from your comfortable leather bucket seat. Traffic is starting to build up but you are ready and move down the gears gently before the road clears and you equally gently depress the accelerator and resume cruising. You can see a bumpy stretch of road ahead and position the car so the hazard disappears directly between the front wheels of the VW causing nil discomfort for those on board.You can see the policemen ahead with a radar gun and you diligently slow down and adopt a speed 1 click below the limit. You even give the officer a jaunty wave and onwards you drive. Ahead is a hazard caused by a broken down lorry so without any desperate braking you indicate early and move into the next lane to pass the vehicle that is not going anywhere soon.Your passengers are relaxed, comfortable and enjoying the ride. You are approaching your destination and looking forward to successful evening at the beach.That is how your FMCG S&OP or Integrated Business Planning (IBP) process should look. Planning and executing your actions in good time and well into the future. Perhaps this is how your process works?The same VW, same driver and passengers, sun, road and the same destination objective. Instead of relaxing back into the leather you are gripping the steering wheel like it was about to fall off. You are leaning forward in the seat looking at the road directly in front of the bonnet/hood (delete as geographically appropriate). Every single stone or bump or holes felt by the passengers as you try to avoid driving over hazards that present themselves at the very last second before they slip under the tyres.

Seeing everything so late you are lurching the car one way and then the other making the passengers uncomfortable and probably a little concerned. Clearly, you are not incontrol of the vehical or your destiny. Looking just over the bonnet at the road surface you also miss the broken down truck in the near distance and smash into the rear at speed. You and your company are having a terrible journey and you do not achieve your objective. You missed the radar gun earlier and now have a hefty fine and penalty points on your licence.Following a rigorous IBP process allows you to plan your innovation, promotional and routine and tactical sales activities in good time ensuring everyone is on board and knows what they have to do well in advance.

If you recognise your company in the chaotic driving example then you have quite an opportunity!Image courtesy of Bill Longshore at

Tags: FMCG, CEO, S&OP, Sales, Integrated Business Planning

FMCG: S&OP morphing into Integrated Business Planning (IBP)?

Posted by Dave Jordan on Wed, Sep 23, 2015

I speak to many FMCG companies who tell me they do not need Sales & Operational Planning in their businesses. As a formal process they may not be operating to S&OP norms but if they are getting their products onto shelves then some form of S&OP must be in place. This may not be optimum or efficient but at the end of the day their products are in front of consumers and ready for purchase or not, depending on how successfully your sales and marketing colleagues have stimulated the market.

This leads me to a frequent problem with S&OP – the name, not the process. Reluctantly sales people do get involved in S&OP process but in my experience they have rarely bought into the idea 100%. Nevertheless, they are there at the meetings and they are sharing data and information etc.

To everyone else in a company the “operational” term usually applies solely to those continually moaning Supply Chain types and sometimes in Finance. Colleagues in all other functions including marketing frequently do not see themselves as part of this process yet it is the lack of rigour and discipline in these sales supporting roles that undermines business performance.

This is why I increasingly prefer the term Integrated Business Planning (IBP) as it covers the whole company plus there is no “and” in the process name. The latter point may seem trivial but S and OP triggers a “them and us” mentality whereas there is no debate about the IBP process. We are in this together (not in the current UK government way) including HR who play the important role of providing the right people and the right training opportunities in order to support the overall business objectives.

The use of IBP does not change the objectives of the process significantly but perhaps the benefits are more clearly defined:

IBP helps to transform planning from a boring must-have into a decisive and continually improving competitive advantage by fostering one integrated planning platform across sales, marketing, supply chain and finance and yes, even HR:

  • A clear and unambiguous understanding of business performance drivers.

  • A dynamic understanding of the financial impact and interdependencies of different planning scenarios.

  • Optimisation and balance of the monthly business plan with longer term strategic planning and identification an allocation of skilled resources.

  • Balancing planning for profitability or volume or growth as per the business need.

  • Unambiguous quantification of financial risk and opportunity of planning scenarios.

  • Continually increasing business flexibility and surety of success.

  • One company working as one team.

Of all these desirable benefits the last is the one you really need to pursue. If you get this working within the framework of an IBP you will be hard to stop in the FMCG marketplace.

Image courtesy of Sheelamohan at


Tags: FMCG, S&OP, Forecasting & Demand Planning, Sales, Integrated Business Planning