Supply Chain Blog

7 Top Tips for Spare Parts Management in Factories

Posted by Dave Jordan on Mon, Jun 04, 2018

Well, I find it strange anyway. Some very large companies spend countless hours and cash in finding and securing a third party logistic provider (3PLP) to take great care of their finished goods assets. The performance of the chosen 3PLP is then measured and monitored very closely using a suite of KPIs, e.g. damages and losses are recorded and usually debited to the 3PLP under the contract terms. A 3PLP is charged with “storing your stuff” as safely and cost effectively as possible and providing easy picking for dispatch.

I often wonder why some blue chip companies fail to adopt similar warehousing and logistics principles in the operation of in-house engineering stores. Depending on the industry, the value of the components can be several millions of Euros. If you do not pay attention to this area then the same things happen as they do with finished goods warehouses, including:

1. Shrinkage or more accurately, theft! Your spare parts stores will be helping to repair private cars, replenish home tool-boxes and raise personal funds through the sale of stolen goods. This might seem harsh but I have seen it first-hand and continue to in large organisations.

Bottling line resized 6002. Important parts are not in the right place. If you do not have clearly labelled storage bins you can stop production lines very quickly losing valuable operating time. At the end of the day an idle line can probably lead to more lost sales than a badly picked finished goods pallet.

3. Spare parts not replenished. If stock control is not rigorous then you will go out of stock on important items just when you need them. Sod’s Law dictates that they will also be the parts with lengthy lead times.

A few simple principles loaned from big scale warehousing will help:

  1. Operate some sort of stock management system. This can be done on Excel with some discipline but specifically designed software packages are available. You need to know where each spare part is located just like in a finished goods warehouse.
  2. Carry out cycle and annual stock counting. Keep a close eye on your high value and production-critical items by counting them on a rotating basis. Do not wait for a year-end count to reveal a gaping hole in your stock value.
  3. Carry out an ageing analysis. Many large stores are full of spares for machines that were last running when “Shep was a pup”. They are of no use to you yet they sit on a shelf and on your books as working capital. Any materials with specific shelf lives also need regular checking to ensure you are not holding something which is at best useless or at worst dangerous!
  4. Secondary store for critical items. Items of high value or those which will stop production can be held in a “store within a store”, e.g. a wire cage with 2 locks. Access to these items requires a more senior employee to be present at issuance, e.g. maintenance manager.
  5. Operate some relevant KPIs. These do not have to be wide ranging or difficult to calculate, e.g. ageing, stock rotation, shrinkage etc. An important KPI can be the value of your spares as a % of the operation asset value. Do you know yours?
  6. Order and stock only what you need. Avoid the temptation to buy in bulk as the price is keener. If you are able to calculate a forecast plus some safety stock then you can minimise your inventory and your working capital. Also, ensure that spares purchasing and receipt are spilt responsibilities or you may find you are buying items you do not actually use in the factory..………
  7. Restrict access to the spare parts stores. If you allow anyone to wander in and remove items then your stock control will be out of control, no doubt. If you require access to spares on a 24 hour basis then ensure the facility is staffed appropriately at all times. Leaving the stores unmanned and the door open should be a disciplinary offence.

When looking at factory operating efficiency people will often focus only on the production line and RM/PM supply. Take a look at how you manage spare parts and you may be able to influence your level of efficiency from an unexpected source close to home.

Image credit: Hi.WTC

Tags: Logistics Service Provider, Dave Jordan, Manufacturing Footprint, KPI, Logistics Management, Inventory Management & Stock Control, Spare Parts

FMCG Supply Chain: KPI Scorecards - Don’t look back in anger

Posted by Dave Jordan on Wed, May 30, 2018

UK has been my base for a few days and even in that short time I have started to genuinely think I must now be a different nationality if not from a different planet. When my denim jeans rip at the knees it is time to throw them out.  I do not have a badly drawn and inappropriately placed tattoo. Nothing on me is pierced or decorated with metal, precious or otherwise.

I do not have a preference for Ant or Dec – the “best” UK double act in a sea of tepid TV reality dross? What is Keith Lemon all about? So many TV channels yet so little talent and even less TV shows worth watching. I put litter in waste bins. I still know how to queue. Even my waistline is now considered trim. I own music recordings where the performers wrote the lyrics and play the instruments and don’t get me started on that things like the Kardashians. 

Nevertheless, there is something consistent. Something that has not noticeably changed since I packed my company leaving gift suitcases in 1991 and departed for the Saudi desert. Traffic Wardens.

FMCG_KPI_SCORECARD_SUPPLY_CHAIN.jpgBeing a Traffic Warden is a universally hated career choice and possibly third on the detest list after Tax Inspectors and Bankers these days with Politicians being universally disliked, of course. In the UK wardens patrol the streets looking for vehicles illegally parked even for a short time or even if the front bumper/fender overlaps the authoritative  yellow lines by a few mm.

Why do they exist; the role that is, not the people? What good are they doing for the general public and the fuel duty/road tax cash-cow motorist? Are they here to keep the Queen’s highways, byways and pavements clear of transportation obstacles to allow free flow of vehicles, people and prams? Or, are they here to generate as much revenue as possible for councils and police authorities?

Is their role to gently correct errors, show understanding and guide people on their future behaviour or are they here to discipline, penalise, visually allocate blame with a sticky yellow ticket and generally strike fear and hate into drivers? Should people hide and shy away from traffic wardens and treat them with mistrust or should they be seen as a welcome, integral part of day to day UK living.

Friend or foe? Beauty or beast? Pariah or paragon? 

So what does your Supply Chain team think about your monthly KPI Scorecard discussions within your IBP/S&OP process? Is it a meeting all about blame and backwards looking fault finding and discipline? Or is it what it should be, an open discussion about what needs to be done better by everyone in the current and coming periods?

You certainly must learn the lessons of past shortcomings but applying the learnings to the future is a far more positive and healthy experience for everyone. Supply Chain Analytics can assist you in reaching a much more mature approach to running your business effectively and without people being at each others throats.

Applying a “…don’t look back in anger” approach will lead you and the business to a much more profitable oasis within the market place.

Image courtesy of iosphere at freedigitalphotos.net

 

Tags: FMCG, Dave Jordan, Performance Improvement, KPI, S&OP, Supply Chain Analytics, IBP

Balanced Scorecard KPIs: Keeping Track of Business Performance 

Posted by Dave Jordan on Thu, Mar 29, 2018

How do you keep track of Supply Chain performance within your FMCG, Brewing or Pharmaceutical business? You do, don’t you? If you are not measuring any KPIs then perhaps you should stop here, read this KPI piece and then pop back and carry on.

You can measure and report in many formats as long as you measure appropriate KPIs for your business. One of the most pointless tasks is calculating and reporting a “KPI” which is in fact worthless and of no beneficial interest. Colleagues in Sales & Marketing usually assume they are immune from KPIs as they gleefully sit back and let the Supply Chain guy take the flak at Board meetings. In reality however, the actions of everyone in the company must be reflected in one or more KPIs. If there is anyone in your business who is not impacting a KPI in some way then perhaps you might consider a round of head-count reduction!

The following is a demonstration example of a Balanced Scorecard of business KPIs. While many are indeed Supply Chain related you need only look at Sales Forecast Accuracy to see how other departments can influence that measurement to a far greater extent. KPIs are designed (usually 2 or 3 per discipline) and presented within the company Scorecard.  Target performance threshold levels are agreed (RAG – Red, Amber, Green) and presented monthly within the S&OP process to measure success and target further improvement.

Supply Chain KPIs

There will undoubtedly be more PIs calculated around the business but those in the scorecard really must be the priorities; those that provide actionable information.

The use of simple colour notation allows business managers to see exactly where problems exist allowing them to focus resources. Conversely, you quickly see what is going well and where you might have to raise the bar to maintain and improve further.  (If you are measuring your KPIs at the same level as 5 years ago then that may reflect a business which is stagnating.)

Whatever design you use it does not really matter but:

1. You must measure KPIs relevant to your overall business strategy and performance.

2. You must report them promptly and widely.

3. They must be discussed at the top table, routinely.

4. You must review and delete/insert new KPIs as the business need develops.

5. You must ensure the targets are stretching but achievable as a constant red display is demotivating.

While KPI stands for Key Performance Indicator it could easily be considered as Keep People Interested!

Image courtesy of Enchange.

 

Tags: Brewing & Beverages, FMCG, Dave Jordan, Performance Improvement, Pharma, KPI, Supply Chain, S&OP

Key Performance Indicators or just monthly data dumping? 

Posted by Dave Jordan on Tue, Mar 27, 2018

Last month I spent a few weeks enjoying the UK weather disaster as 10mm of snow brought life to a halt. While there I moved the heiress into her new apartment - not a flat now as student days are over, very posh. Hopefully, that will be the last time I have to manage boxes down a narrow and winding staircase and my glass back can get a much needed rest.

Job done, I made my way back to base with an unpleasant 15 hour delay on BlueAir but at least there was no jobsworth amongst the crew.  Despite the weather I continued my minimalist approach to clothing to ease my way through the various security screenings. I wore no belt, no watch, no metal at all in an attempt to glide through the checks without being patted, prodded or made to make a second pass through the metal detector. Unfortunately, my innocent pack of UNO playing cards looks like plastic explosive, apparently.

The end of the world was in progress on arrival back in Bucharest. Heavy dark and angry clouds were dispensing precipitation by the bucket load and it was relentless. The sleet quickly soaked my UK grade Arctic coat and everything underneath including socks.  Futile attempts at shelter included the held-aloft flat newspaper and the rather dangerous shopping bag with eye holes over the head. Even the all in one little black bin bag number a girl was wearing (or was it a dress?) was ineffective in diverting any of the torrential downpour. This was a real storm without escape where complete saturation was guaranteed and inevitable. 

I felt rather like an FMCG CEO. Saturated by data that people believe he/she needs to see in order to run the business. Not actionable information but raw data. Completely submersed in meaningless numbers and perceived trends. Often, that data is aimed at passing the buck to other departments for failure or lack of success or to ensure backside protection during the post-mortem that takes place long after the month or quarter or whatever period has closed.

Even if you do not run a swish ERP you need to be able to address in-market issues while you still have a chance of making a difference. However, to do that you need to receive information which quickly converts to relevant knowledge and then facilitates actions. To actually see the reality of market performance you don’t need masses of numbers, you need facts.

image.pngIf you don’t have a KPI or Balanced Scorecard then sort one out quickly. If you already monitor performance in this way then take a long hard look at what is actually being reported; is it for the benefit of the reporting colleague/department or for the benefit of the entire company?

Remember that KPIs never tell the full story. When a KPI refuses to improve despite all efforts it may well be due to the impact of another completely different and apparently unrelated measure. In such cases you should adopt a Supply Chain Analytics Approach to deep dive into the detail and really see what is happening all along your Supply Chain.

Image courtesy of SupplyVue at Concentra

 

Tags: FMCG, Dave Jordan, CEO, Performance Improvement, Pharma, KPI, Supply Chain, Supply Chain Analytics

FMCG Turn-around Intensive Care Recovery KPIs

Posted by Dave Jordan on Wed, Sep 06, 2017

On a daily basis the amount of care we give to the human body is remarkably little. When you are feeling in good shape the best the body can hope for is a good wash, a brush of the teeth and a slap of moisturiser if you are a bit of a girly. What else? Haircut and manicure perhaps oh, and possibly a check that your weight has not dropped that desired 10% overnight.

Considering the complexity of the human body and how we cannot live without it we do not spend too much time analysing how it is performing. We probably spend more attention on our cars and IT gadgets. Why is my PC running so slow? The car is overheating, I must check this now. Such symptoms are immediately of prime importance and top of mind and must be addressed now!

This all changes when we are feeling unwell. Suddenly we are taking our temperature, blood pressure and pulse rate. Blood tests may be needed. You may be wired up to monitor to see how the heart or brain is functioning. The body is now getting the intensive care it needs in hospital. Recording and monitoring this raft of data is the route to a hopefully full and speedy recovery.

FMCG_RECOVERY_SUPPLY_CHAIN_KPIS.jpgIf your business is operating well and there is even some growth in these testing times then the usual keep fit-heart monitoring Balanced Scorecard KPIs are reported weekly or monthly. The focus is usually on getting your stuff to customers and onto shelves at the right time, in the correct quantity and at the lowest cost. Along with other company measures, e.g. finance, HR, SHEQA, the scorecard shows the health of the business.

When all is not going smoothly however, the Balanced Scorecard may need supplementing with other measures. In companies where sales are below expectations and cash flow has dried up you need intensive care focus in that area. This does not mean you stop generating the Balanced Scorecard as this will contain important financial and non-financial measures. Instead, you need to place the sensors in the critical locations.

What about when things are not going well? Measuring the usual set of KPIs is all very well but when you are in a mess you need some intensive care. For businesses struggling with tight cash flow here are top ten tips for some relatively simple Recovery KPIs:

  1. Sales-out Sales-in do not guarantee you a final cash sale to a consumer so focus on the final sales transaction.
  2. Discounts Control how much discounting is taking place by those generous sales people. Is it authorised in advance and at the correct level?
  3. Debtor Days This is money owed to you so negotiate favourable terms and constantly review. If 60 days has been in place for years then it is about time this was challenged so apply some pressure.
  4. Creditor Days You owe this money but if you upset suppliers they will stop supplying! Renegotiate where possible and do your best to pay on time as you never know when you really need a favour.
  5. Overdues Where money is due to you and has exceeded the agreed terms you need a persuader to get on top of late payers.
  6. Forecast Accuracy Do not look at every single SKU; apply segmentation principles. Determine which SKUs are important and make a healthy profit, focus here.
  7. Lost Sales Investigate every significant lost sale and systematically apply a 100-year fix so mistakes do not recur.
  8. Potential write off Monitor stock age internally and at distributors and avoid this criminal cash waste.
  9. RM/PM stock If you are overstocked you should not re-order and you might consider selling some items. Your stocks should be aligned with those important SKUs identified above.
  10. Finished Goods stock Again, ensure your key SKUs are always available in the required quantities. Promote any excess or slow-moving stocks to generate income and minimise potential write off.

In addition to the sensible tight control of discretionary spend this approach can stabilise your vital signs and guide you back to a healthy glow without the intensive glare of the suits from HQ.

Imag courtesy of moggara12 at freedigitalphotos.net 

 

Tags: FMCG, KPI, Supply Chain, Cost Reduction, Inventory Management & Stock Control, balanced scorecard, Recovery

Supply Chain Performance: Budget Airlines and KPIs……

Posted by Dave Jordan on Wed, Jun 14, 2017

I have never been a fan of budget airlines and certainly not since one left me sleeping overnight in the back of beyond that is Luton Airport. That may be an exciting addition to a student’s back-pack holiday itinerary but when you have a glass back it is not so appealing.

Nevertheless, they do fly to or near to where I need to be and the prices are much cheaper if you book well in advance, don’t pay with a credit card, don’t carry any luggage, don’t eat or drink, wish to sit next to your wife or use the toilet (thank you Fascinating Aida).

So, once again I found myself on the busy Birmingham – Bucharest route after visiting the heiress and some things are inevitable on a no-frills airline. I know the dimensions of my carry-on bag but so many others either forget to check or think they will get away with a dayglo sausage the size of Sicily without paying the penalty fare. That’s how they make their money; last minute, extortion, take it or leave it.

My second frequent observation is that there is usually someone sitting in my seat when I board. Yes, they move when challenged but only to another seat which is not theirs either. I know some airlines do or did provide a free seating/chaos policy but when you have a seat allocated on the boarding pass, sit in it!

Finally, we are off the ground and ascending before soon the engines throttle back and this is when I want to shout out some helpful advice to the captain, “change gear now”. I know how planes work but that bit off take off always makes me uncomfortable. The beep of the seat belt sign going off leads to an immediate dash for the toilets (I hope they pre-paid) and a long line of shuffling bodies.

The line of casually shuffling bodies soon turns into a twitching queue of concern as the red toilet sign above the cabin remains illuminated. Phones are consulted to pass the time and refocus the mind; people even read the safety information booklet and the duty-free magazine which is anything but duty free, of course.

Finally, a Flight Attendant needs to transport a metal trolley on inedible stuff to the other end of the plane and realises she cannot possibly conquer the lavatory line and politely knocks on the toilet door. No answer. Another tap-tap-tap plus an enquiry if everything is OK also fails to change the indicator from no-go red to free flowing green. The red light seems to glow brighter as if to irritate those with crossed legs.

This is now serious as the inedible stuff is getting cold and more people are standing in the aisle than sitting in seats. The pilot is probably having to battle with the controls to keep the plane centrally balanced. Something must give and judging by the faces of the queuers, this will be very soon. The red light glows.

Then action; the queue is guided away from the toilet door and back behind the curtain. Male and female crew members are poised to open the door using the emergency switch and they don’t know what or whom they will find. The door is cracked open as male and female eyes strain to see which crew member will take the lead and help the possibly stricken passenger. The red light vanishes and the green for go appears above the curtain. Relief is at hand.

There’s nobody in the toilet. The grateful mass of people takes one step forwards as the end is finally near.

FMCG_SUPPLY_CHAIN_HUMOUR_KPI_ANALYTICS.jpgSo, what went wrong? Will the cleaning service at the destination find something a very unexpected item in the garbage area? Is someone hiding in the skin of the aeroplane plotting something nasty?

There was never anyone in the toilet in the first place and staff had forgotten to flick the switch to make it open for business. The red light stayed illuminated but it was not telling you what the real situation was with toilet occupancy and the impasse was allowed to go on for quite some time. The KPI (kay pee aye) was showing red but it was not telling you the reality and certainly not everything.

Don’t always believe your KPIs are telling you the whole story; challenge them routinely. They are frequently an indication of performance at a certain moment in time and a longer-term view is necessary as the business evolves. If your business is in trouble you may need a set of Recovery KPIs whereas a booming business on a roll may need a set which is far more forward thinking and aggressive. Supply Chain Analytics help you take the longer term view.

Blindly believing long term over or under performance can see your company quickly performance go down the pan.

Image courtesy of phasinphoto at freedigitalphotos.net

Tags: FMCG, Dave Jordan, Humour, Performance Improvement, Pharma, KPI, Supply Chain, Supply Chain Analytics

Global FMCG Supply Chain Transformed by Analytics

Posted by Dave Jordan on Wed, Apr 05, 2017

The Challenge

A leading global FMCG company undertook an aggressive supply chain improvement programme across 150 markets. The objective was 100% alignment of worldwide operational activities with company strategy and objectives. Not an insignificant task! 

The Problem

The organisation routinely calculated and published multiple KPIs and targets, but a lack of data integrity, accessibility and insightful reporting limited supply chain progress. Data was ‘scattered’ across multiple sources including enterprise ERP, market ERP, multiple factory systems and MI systems. No shortage of data but a severe dearth of insight and information.

In several markets, the organisation was suffering from volatile and highly variable short-term supply chain plans and an excess of finished goods inventory, despite a stable and predictable consumption. The ways of working within the supply chain and the interactions externally were traditional, with operating practices and decision making analysis unchanged for far too many years.

The Solution

Engagement with key stakeholders across the business established the corporate need and critical success factors for the analysis. A Toolset & suite of SKU-level Dashboards was developed, focussing on demand, planning, materials, production & execution. Company data was extracted into the toolset to provide information leading to appropriate actions. New monthly reporting and analysis revealed significant inventory reduction opportunities and importantly, operational management had the confidence to drive the required changes with a far greater understanding of potential outcomes.

sc_transformation_supplyvue_updated.pngThe Winning Tool

SupplyVue is a revolutionary supply chain analytics solution.

  • SupplyVue uses existing data to analyse and diagnose problems and successes in the supply chain.
  • SupplyVue provides a suite of tools and dashboards to model different inventory, financial and service level scenarios.
  • SupplyVue provides the visibility, data, information and business case to drive changes in the supply chain while fully understanding potential trade-offs.
  • SupplyVue enables provides visibility across the end-to-end supply chain to deliver better service to internal and external stakeholders.

The Result

Hard work, patience and trust in the analytics tool provided:

  • Improved forecasting accuracy.
  • Senior management tools to set informed policy.
  • For the first time, planners had powerful and relevant tools to perform root cause analysis of supply chain issues.

The big one? The company achieved an inventory reduction of 40% (yes, forty) in 12 markets amounting to US$ 200 million. Not too shabby eh?

Plus, something that is difficult to measure. SupplyVue raised the morale of supply chain staff who were now able to offer intelligent and assured solutions rather than shoulder shrugs and excuses.

The Future

Would you like to read more about analytics?

Supply Chain Analytics

SupplyVue

The Pathway

How to transform your supply chain?

The Next Important Step

Enchange can help you transform your supply chain, the overall business and personal ambitions!

To find out how we can help you and to enquire about our wide range of supply chain and related services please click here and contact us.

Image courtesy of Enchange.com

Tags: Customer service, FMCG, KPI, Supply Chain, Inventory Management & Stock Control, Supply Chain Analytics

Supply Chains – A second look: What do all those initials really mean?

Posted by Dave Jordan on Wed, Feb 08, 2017

In common with many business functions Supply Chains adopt multiple initials and/or acronyms to describe various tasks and processes they manage on a daily basis. Those not familiar with SC-speak will often sit bemused as various initials are quoted and debated and then usually blamed for some tenuous lost sales claimed by Sales and Marketing.

Here I take a fresh look at just a small selection of those Supply Chain initials and acronyms.

SC – Super Colleagues. Well, I may be biased but that is what you usually find. Supply Chain people must react to wildly varying demands and impossible timings but more often than not they succeed to get stock to the right place at the right time.

SOP - Supports Outstanding Performance. If you do not follow an S&OP process and your business is doing well and is robust then a pat on the back is deserved. However, if your business is struggling then you might consider the benefits of S&OP which can make all the difference.

IBP – Irritating But Productive. Often considered to be a more mature version of S&OP, Integrated Business Planning can be similarly difficult to get started but when everything clicks, business benefits.

Supply_Chain_FMCG_Initials.jpgSAP - Spreadsheets Are Preferred. The use of spreadsheets is prevalent in many businesses and equally common is the number of CEO’s who believe spreadsheets are NOT being used in their workplace! They almost certainly are but what can you do about this?

IKA- Irritating, Keep Away. In mature Western European markets, big name International Key Accounts are firmly established but in many other parts of the world the reality is quite the reverse. Traditional Trade is a very important part of many developing businesses yet most fail to pay sufficient attention to the continued growth potential of the TT channel.

SKU - Sales Keep “Upping”. Introducing new SKUs really should be a cross business decision taken within the context of S&OP and with sound financial analysis. Sadly, this does not happen very often as businesses rack up lengthy SKU lists where the tail items do not even pay for themselves in turnover, margin or profit.

KPI - Keeping People Interested. The adage of “if you don’t measure then you cannot improve” is certainly true here. Take care to manage your KPI’s closely and frequently but make sure you have a set which ensures everyone knows how they impact collective team performance and results. Visibly reward against the relevant KPIs and your staff will keenly follow them.

ERP – Everyone Requires Products. The whole purpose of your Enterprise Resource Planning is to get your products to the right place at the right time and at optimum cost. Occasionally, priorities must be made between demanding customers and a good ERP will guide your decisions.

PLP -  People Loading Products. Think long and had before outsourcing your outbound logistics operations to a 3rd party as they may not be ready to take on your business, seamlessly.  Prepare thoroughly and ensure you know exactly what you want from them and the relationship. A big step that is difficult to reverse without pain so be careful!

WMS - Where’s My Stock? Your 3PLP partner should be left to run their own business as that is why you pay them. However, you need to be involved in the stock counting process or you will lose sales and experience costly year-end write offs.

4PLP - 4 People Loading Products. If you have successfully used 3PLPs for some time you might wish to take a look at what a 4PLP can offer to the business. This is certainly not for everyone but can be very cost effective.

RTM - Retail Takes Money. Whether your focus is on IKA or TT how you manage your distribution network will be a key driver of your success in the market place. It is a fact that companies spending time and effort getting their developing market TT distributor networks in good order are more successful.

FIFO – Find It, Fuss Over. When you (or your 3PLP) operate a tight warehousing operation you will know where your stock sits, how old it is and what needs to move out to avoid write off costs and the inevitable poor customer service.

OTIF - Often The Invoice Fails. If you fail to deliver orders on time and in full you invite the customer to challenge the invoice and delay payment until you have made financial adjustments.

There are many, many more examples of SC-speak but this set will do for a KO so TTFN!

Image courtesy of boulemonademoon at freedigitalphotos.net

 

Tags: SKU, FMCG, Route to Market, Dave Jordan, KPI, Traditional Trade, S&OP, Logistics Management, Distribution, Inventory Management & Stock Control

FMCG Supply Chain: KPI Scorecards - Don’t look back in anger

Posted by Dave Jordan on Wed, Mar 16, 2016

For a change, UK has been my base for a few weeks and even in that short time I have started to genuinely think I must now be a different nationality if not from a different planet. When my denim jeans rip at the knees it is time to throw them out.  I do not have a badly drawn and inappropriately placed tattoo. Nothing on me is pierced and decorated with metal, precious or otherwise.

I do not have a preference for Ant or Dec – the “best” UK double act in a sea of tepid TV reality dross? What is Keith Lemon all about? So many TV channels yet so little worth watching. I put litter in waste bins. I still know how to queue. I honestly don’t care about the new line up of Top Gear. Even my waistline is now considered trim. I own music recordings where the performers wrote the lyrics and play the instruments and don’t get me started on that Justan Ameoba fool.

Nevertheless, there is something consistent. Something that has not noticeably changed since I packed my company leaving gift suitcases in 1991 and departed for the desert. Traffic Wardens.

FMCG_KPI_SCORECARD_SUPPLY_CHAIN.jpgBeing a Traffic Warden is a universally hated career choice and possibly third on the detest list after Tax Inspectors and Bankers these days with Politicians closing in, of course. In the UK wardens patrol the streets looking for vehicles illegally parked even for a short time or even if the front bumper/fender overlaps the authoritative double yellow lines by a few millimeters.

Why do they exist; the role that is, not the people? What good are they doing for the general public and the fuel duty/road tax cash-cow motorist? Are they here to keep the Queen’s highways, byways and pavements clear of transportation obstacles to allow free flow of vehicles, people and prams? Are they here to generate as much revenue as possible for councils and police authorities?

Is their role to gently correct errors, show understanding and guide people on their future behaviour or are they here to discipline, penalise, visually allocate blame with a sticky yellow ticket and generally strike fear and hate in drivers? Should people hide and shy away from traffic wardens and treat them with mistrust or should they be seen as a welcome, integral part of day to day living.

Friend or foe? Beauty or beast? Pariah or paragon? Ant or Dec?

So what does your Supply Chain team think about your monthly KPI Scorecard discussions within your IBP/S&OP process? Is it a meeting all about blame and backwards looking fault finding and discipline? Or is it what it should be, an open discussion about what needs to be done better by everyone in the current and coming periods?

You certainly must learn the lessons of past shortcomings but applying the learnings to the future is a far more positive and healthy experience for everyone.

Applying a “…don’t look back in anger” approach will lead you and the business to a much more profitable oasis within the FMCG market place.

Image courtesy of iosphere at freedigitalphotos.net

 

Tags: FMCG, Performance Improvement, KPI, S&OP, IBP

Supply Chain: Communication teases out scorecard improvement

Posted by Dave Jordan on Thu, Mar 03, 2016

When I used to spend far too much of my life flying around the globe I did my best to avoid cabin chat with fellow passengers. That may sound a bit miserable but I just needed some sleep before arriving at the next FMCG supply chain challenge.

I still prefer to strap in with a hand wrapped around an old Cockburn’s port (in business class) or a plastic cup of wine from godknowswhere in cattle class and sleep until touchdown. My record sleep was non-stop from Kuala Lumpur to London when the air crew checked I was actually breathing every few hours.

Even then there were some travellers who obviously needed their chat fix to relax and they were persistent. This led me to design a range of responses to the inevitable “what do you do?” enquiry that would leave the chat ball squarely in their court and keep it there!  My top five “stop the chat” responses were:

  1. I have just been released from prison for a really bad thing but don’t worry, my drugs usually get me through the flight.
  2. I am an undertaker with excess capacity seeking new business.
  3. I am an erotic dancer and stripper (no, not of the paint kind).
  4. I collect nail clippings; from hamsters.

If they persisted I would look them deeply in the eyes and say:

  1. I’ll do whatever you’d like me to do………

FMCG_SUPPLY_CHAIN_COMMUNICATION_SCORECARD.jpgThe temptation to do this in business must be avoided as discussion and debate are of course vital for success.  Nevertheless, the wrong question at the wrong time in the wrong tone can hide issues and keep them hidden until lasting damage is done. When questioning is consistently about what went badly you seldom hear what really did go wrong only what the “accused” is willing to reveal without exposing themselves or colleagues. 

To stem the tide of accusative questioning in an IBP/S&OP meeting try a different approach and see how colleagues react. Throw in a few of these questions/requests to get the chat ball freely bouncing back and forth and avoid the what went wrong/who did wrong interrogation.

Performance Scorecard

Measurement

Achievement

Board feedback

Forecast Accuracy

85%

Getting better. Please share some of the successes from the month to see if can share the learnings across all categories.

Overall Equipment Efficiency

75%

How can we maintain this momentum so we can continue to postpone new capex?

Picking Accuracy

99.95%

Nearly perfect; can we do any more or is it a case of diminishing returns?

Customer Service Level

98.75%

We are delighting 98.5% of our customers but some still need a bit more from us, or do they? Why don’t we check what the other 1.5% really need from our extended supply chain?

Inventory Level

15 days

Such a difference to 12 months ago after our SC Analytics investment. Could we shave off another day?

When you see scores very close to the objective or what is actually possible given the constraints of your supply chain then change the approach. Tease out a little more performance rather than stopping the chat ball dead in its tracks.

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Tags: FMCG, Performance Improvement, KPI, Communication