Supply Chain Blog

Postman Pat, Postman Pat, Postman Pat & his Supply Chain hat

Posted by Dave Jordan on Wed, Jul 06, 2016

I recently peeped outside of the FMCG and Pharmaceutical world and took a look at the amount of empty beds in the National Health Service in UK and how a little alternative thinking plus basic demand and supply planning expertise could improve bed utilisation. Today it is the turn of the Royal Mail and all those “black and white cat” postie types to be in line for my critique. 

Before you say that the Royal Mail is not a proper supply chain, it is a supply chain and a very complicated one at that. Apart from the reducing but still significant Christmas card peak, this is a business that cannot really forecast how many letters and parcels will be dropped into Post Offices and Post Boxes for delivery on a daily basis. Or perhaps they can or should? Is it any different from the daunting, daily, dynamic demand volatility experienced in Tesco, Asda and Aldi etc.?

Anyway, that is not the issue on this occasion but it is about the Royal Mail redirection service which should be a very straightforward formality. You move to a new address and pay the Royal Mail to keep an eye on your letters and parcels and forward them to your new abode. This is not as simple as it sounds as finding that gas bill in a plain brown envelope must be very close to searching for a needle in a haystack. Nevertheless, they have been doing this for ages and in large numbers so should be very proficient.

FMCG_MAIL_POSTAL_SUPPLY_CHAIN_SERVICE.jpgNot this time. They got it horribly wrong from day one and continued to do so as even “signed for” mail which must be capable of automatic sorting was sent to the old address. Luckily we are still in the locality and in contact with the remaining Neanderthal student residents who in their few conscious periods send vowel-free texts letting us know Postman Pat has left something in the heiress’s name. Before they have the chance to eat or smoke what has arrived we quickly pop down and rescue items that slipped through the redirect net. That net must have holes the size of Ronaldo’s ego.

After repeated telephone calls and emails and the release of only a minor amount of my pent up frustration from afar, Postman Pat has refunded all costs and is now carrying out the service – very efficiently now, incidentally – free of charge. What a waste of time, energy and other resources!

I have no idea what the inside of a sorting office looks like or what processes and procedures are in place or their daily challenges but failure to carry out core advertised service is very disappointing. Delivering enveloped and packaged mail is what they do best; if they cannot get that right then what chance do they have with other value added services?

Walk into a pub on a scorching day (ok, so that is not going to be in UK) to be told sorry, no beer. Step into a supermarket to find no bread, milk, tea or cheese! Pull up at the McDonalds drive-in to be told no fries today - actually no bad thing!

You have to get the basics right or your credibility with existing and potential new clients is severely limited. Some organisations bend over backwards to gain new business and rightly so but why don’t they bend further backwards to keep that business? In FMCG and Pharma I find business retention is far harder than finding it in the first place.

Image courtesy of Ohmega1982 at



Tags: Customer service, FMCG, Performance Improvement, Pharma, Forecasting & Demand 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 Route to Market Distribution: Free Distributor Assessment Tool

Posted by Dave Jordan on Wed, Jan 28, 2015

FMCG producers are often far too ready to blame their Distributors when sales do not go to plan and targets are not met. However, it is rarely all their fault particularly if producers are not clear on what is expected.

To help Producers understand the real state of their Distributors, Enchange has released a free - yes, free - tool to guide an assessment of Distribution networks. While focussed on FMCG the tool is applicable to all sectors using distributors.

Download the tool here.

The RTM Distributor Evaluation Tool has been designed to guide your evaluation of four key capability areas:

Partnership – is the relationship a one way street or do you actually talk to your distributors? Do you treat distributors as real partners aligned with your business objectives?

Planning & Logistics – how does the distributor Supply Chain stack up? Your Supply Chain maybe a Rolls Royce but what about theirs, can it do what you want it to do?

Sales Management – how does the distributor take orders and execute them? You would be surprised (and probably disappointed) at how some major producers are represented in front of customers.

Finance & Back-Office – how well is the distributor organised? How health are the finances? Does the distributor exploit IT or is it still a pen & paper based system?

The tool is not difficult or complicated and it will not take too long to run through the various questions and benchmarking statements. The important point is that the tool is completed as accurately and honestly as possible and certainly in collaboration with the distributors. I recommend you use someone unrelated to the distributor sales function or even a 3rd party to run the process to ensure you receive a reflection of reality.

Of course, the tool is not comprehensive but it can be used to provide a reasonable guide to how your current distributor network operates. Why not try it out; you may well be very surprised by the results!

Image courtesy of Enchange at

Tags: FMCG, Route to Market, Dave Jordan, Pharma, Traditional Trade, Sales, Distribution, RTM Assessment Tool

(FMCG) Friendly Man Carrying Gifts & (RTM) Reindeer To Market

Posted by Dave Jordan on Tue, Dec 02, 2014
Santa Claus aka Father Christmas, Kris Kringle, St Nick
Market: Most of the World
Reindeer To Market (RTM) Distribution
Deliverable: Evaluation of RTM against sector benchmarks

Summary of Evaluation

Click here to enlargeMagnifying Glass

 RTM reindeer to market

The project delivered:

  • A detailed evaluation of the Christmas RTM deployment highlighting strengths and weaknesses.
  • A grading of each core element in terms of capability to deliver the presents in compariosn to benchmarks.
  • A framework development plan for parents and Santa Claus.
  • A clear business case for the continuation of Christmas.

Santa FMCG Christmas resized 600We would like to thank Mr. Claus for allowing us the opportunity to evaluate this important Reindeer To Market network. The network is in very good condition and we wish him every success on the 25th December.

Need help with your RTM deployment? Click here and we will give you a call.

Santa image courtesy of stock images at

The full assessment tool includes 10 individual elements and this can be found HERE.

Other seasonal yo ho ho posts:

Tags: FMCG, Route to Market, Christmas, Dave Jordan, Pharma, Traditional Trade, Distribution, RTM Assessment Tool

Opening a new FMCG/Pharma warehouse? Top Ten Tips to success

Posted by Dave Jordan on Wed, Nov 05, 2014

I suppose it’s inevitable with age. Everything starts to fall apart eventually and it is amazing how it creeps up on you. You remember giggling silently when someone of a certain age walked in to a room and could not remember why or what they are supposed to be doing. I do this and like millions of others I have to return from whence I came to try and remember why I purposely strode into another room.

Packing for business travel used to be automatic and everything that was required was found and packed without resorting to lists. Recently I have found myself in Africa without toothbrush and paste but that was soon remedied via a hotel vending machine. I was not so lucky on arriving in Cyprus to find I did not have any undies. You try finding them in a budget hotel vending machine!

Now let us look at warehousing. A project to design, build and open a new warehouse is usually large and complicated but at least it is an indication something is going well in the business. Assuming the facility is built on time and to specification and all legal matters are in hand, here are some important aspects you need to remember in order to bring the warehouse on stream smoothly.

Project Network

A suitably qualified and experienced person should be leading the project and one of the key tasks is to maintain a very detailed network.  The network should be widely available and routinely updated to ensure potential issues are flagged up in real time. You do not need expensive software to do this but you do need rigorous project management discipline.

Job Descriptions

Every role should have a job description including the oft forgotten pallet repairer. Unless you are about to run an innovative warehouse you will have no trouble finding good job description templates on the internet. Once adjusted to suit your particular circumstance you need to ensure suitable role segregation has been defined.


Do not wait until the last minute to recruit staff. Get them in as early as you can so you are able to see how they operate against job descriptions and them working in teams. Companies frequently leave this too late thus placing training and commissioning in jeopardy. If you are transferring staff from an existing warehouse to a new facility you must ensure a controlled transition. An army of people turning up for work on a Monday morning in a new warehouse will not work.


Untrained people are dangerous and particularly in a warehouse situation if you are using narrow aisle high reach FLT’s. All employees require formal and documented training in their particular area before they are set loose in the warehouse. Do not skimp on training for specialist roles, e.g. for high reach truck training you need certified training by the supplier directly.


Dry Commissioning

Before you open for business you need to systematically test all your equipment to verify that it operates to desired specifications. You do not need a warehouse full of goods to do this and you should use this exercise to iron out any glitches.

Wet Commissioning

Now you do the same but under realistic conditions moving finished goods. Generate some test inbound receipts and customer orders. Go through the motions of the actual operation without running the risk of disappointing customers or injuring employees. Attempt to operate at high capacity so your process is well tested.

Ramp-Up Planning

However well you have prepared it is highly unlikely you will be at 100% logistical efficiency immediately. Set targets which see acceptable efficiency achieved within a reasonable time frame and display the plan widely so everyone is singing from the same hymn sheet.

IT & Comms

Do the telephones work? Is the IT network in place and accessible? Do the hand-held scanners communicate correctly and from all areas of the warehouse? Has the ERP been tested and tested and tested again?

Stock Count

A key part of the preparation phase is the receipt of stocks as if these are not counted and booked accurately you will soon be in trouble. Mass stock movements present opportunities for “shrinkage” and make no mistake somewhere along the line someone will be looking to exploit this discontinuity.


Suppliers and customers need to know what you are doing and not least as the start up may pose them problems. With the ramp-up plan in mind you should make sure your suppliers and customers know what to expect and when you are capable of meeting their usual demands. They may not have much sympathy for you but being forewarned often helps to ease relationships into the new ways of working.

You will not get everything right and something always crops up to derail even the most well prepared, planned and activated project.

What will you forget? When I look at all the warehouse start-ups I have seen there is one item which is frequently missed. Remember to buy sufficient batteries to keep your FLT’s operating 24/7!

Image courtesy of lamnee at


Tags: FMCG, Logistics Service Provider, Logistica Management, Dave Jordan, Pharma, Supply Chain, Inventory Management & Stock Control

FMCG/Pharma: Sales time running out fast in Q4; load the trade?

Posted by Dave Jordan on Wed, Oct 22, 2014

Like students cramming for examinations, a squirrel storing up acorns for dark, cold, winter hibernation or a politician telling all sorts of lies before an election, time is running out and that time is nigh for FMCG/Pharma CEO’s. If your business closes the books at the end of December then you have less than three months left to make a difference before the year slams shut. Will your next job be Country Manager Falkland Islands or VP Europe?

FMCG Pharma CEO year end sales loading resized 600If all your competitors had the same book closing deadline then the task might be easier or at least the playing field may be level. However, depending on the home country of competitors they could be closing their book at a completely different time of the year and some are not even close to calendar year timings.

That adds a bit of spice doesn’t it? You are searching for every last penny of sales and savings while your competitor with a registered office in South Africa is still sitting on a huge advertising support budget. Yes, at some stage in the future the financial advantage boot is on the other foot but now is the time you have to dictate the success (or failure) of the year.

On the 1st October you think you have three months to go but you probably don’t! You might have Thanksgiving taking a few days out of your retail opportunity or Christmas which really queers the pitch at the end of the year. Christmas may well be a peak time for many FMCG brands but it is also a difficult time for producers as days and staff are lost to holidays and the weather in the northern hemisphere can dump a lot of snow on your logistical efforts to get stock delivered. In other parts of the world you have moving religious eid holidays placing pressure on the sales numbers.

Will you resist the temptation to sacrifice Q1 next year in order to reach current year targets? Even if you have a juicy new role in the pipeline decisions you make now will still impact executives even if they move on before the effect of any “trade loading” arises. Top team pay increasingly includes elements relating to the ongoing performance of the previous employing unit. So, if you invoice your entire warehouse contents to customers at 23.59 on 31 December and the company sells very little in Q1 you know you will be found out. Don’t do it!

You cannot stop time – even Joan Collins has finally realised that – so get the top team together, make some choices, make some decisions, insist on alignment and openness and plan to activate the required sales off-take for the few remaining selling days available. (Psst, that’s called Sales & Operational Planning (S&OP).)

Image courtesy of Renjith Krishnan at


Tags: FMCG, Dave Jordan, CEO, Pharma, Supply Chain, S&OP

FMCG: Top ten tips for totally terrific S&OP – not a fishy tale!

Posted by Dave Jordan on Wed, Jul 16, 2014

I have travelled quite a lot over the years and tried to add one new country each year until I stumbled at 45. Many were holidays but a majority were on business with very few opportunities available to actually see the place. “Oh, you must be so lucky to travel” – not. During the hundreds of flights taken I have seen some very unusual things aboard aircraft.

S&OP_Top_10_Tips_MrCEOOn one flight in the Middle East the passenger in the business class seat next to me was a hooded falcon. Taking a flight out of Kuala Lumpur I soon realised I was the passenger list and that is a rather spooky situation when you are in a deserted Boeing 747 – service was ok, though. My most frightening experience was seeing man carry a blister pack of craft knives on board!

More recently, I scanned surrounding passengers in that dull period on a 3 hour flight after the inedible food had been consumed and before the hopeful sale of duty free items to see a young girl holding a small, clear plastic bag with a live goldfish inside. How does that happen in these security conscious days? I suppose if the amount of liquid was less than 100ml it could qualify as “safe” to carry on but what if the fish was not really a fish........? Would the fish need a pat-down search? What would be the scale of the risk .....groan.

When you are trying to secure the safety of hundreds of passengers on a plane and potentially on the ground you really do need a set of strict and consistent rules as if one airport drops its guard something significant could be missed.

Similarly, when you are running an FMCG or Pharmaceutical S&OP you need a set of consistent and widely understood rules and measures to get the best out of the process. Ok, so the implications of bending the rules are not usually life threatening in this context but getting this wrong can certainly bring your career to halt and make those nice bonus payments few and far between.

Top ten tips to a totally terrific S&OP:

  1. CEO and senior board buy-in. Without this don’t even bother to start S&OP.
  2. Appoint a process leader who knows S&OP inside out and has gravitas in the company.
  3. Create the role of Data Manager to turn data into information and a facilitate focused actions.
  4. Don’t promote or advertise S&OP as a Supply Chain process or one that it is designed to improve SC performance. Yes, it will but the ultimate priority is higher sales.
  5. Agree and display a set of KPIs that involve all disciplines to motivate co-operation and team working.
  6. Get the right people involved in the meetings – don’t allow people to delegate to junior colleagues.
  7. Get meeting dates in diaries for at least 12 months, rolling.
  8. Insist on personally seeing minutes and action lists; do not let meeting discipline fall away.
  9. Be hard on dissenters and laggards.
  10. Do not stop S&OP or you will end up with a business far worse than when you started.

If you stick to these rules you will be successful and I have now seen this achieved in many disparate environments leading to improved top and bottom lines. No, it is not rocket science but sticking to the rules can make your sales rocket.

Image courtesy of Dan at

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

Gartner Top 25 Supply Chains: Did your FMCG company make the list?

Posted by Dave Jordan on Wed, Jun 11, 2014

The annual Supply Chain “Oscar’s” have been announced by Gartner for 2014. I list the top 10 here but to see the full list of top 25 global Supply Chains please click and surf here.

  1. Apple
  2. McDonald's
  4. Unilever
  5. Procter & Gamble
  6. Samsung Electronics
  7. Cisco Systems
  8. Intel
  9. Colgate-Palmolive
  10. The Coca-Cola Company

Many of the usual suspects are present as you would imagine but what is very interesting for me is seeing Unilever in the top group after being as low as 21st in 2010. Keep up the good work boys and girls; my pension depends on you.

supply_chain_top_performers_2014I doubt any SC professional will get over-excited about being in the top 25 but what about those names that are not present? Some will have opted not to take part and others may be in the midst of huge change and could not be contenders in the assessment period. Also, I guess some people do not want to be at the top of the pile either as the expense to get there and stay there may not be their priority for investment. However, if your major competitors are on the top 25 list and you are well off the pace then surely that must be a problem.

The top 10 has four multi-national FMCG giants so the process of getting stuff onto supermarket shelves is clearly being done very well by some companies. So if we assume the science behind the assessment is sound there are a large number of companies doing something wrong or at least not nearly as good as others.

Electronics and computing related companies are well represented and they of all people will be exploiting the technology they have invented to optimise availability and speed of supply. Amazon is another interesting company in that it now acts as a Supply Chain company rather than a books/CD/DVD supplier. Their product range is huge and they are successful by having a very slick Supply Chain. You can buy a new dress from all sorts of places but possibly only Amazon will get it to your door the very next day at a fraction of the cost of that charged by couriers for a similar service.

What about McDonald’s fast “food” restaurants? You may know I am not a fan of their offerings but you cannot knock them for their success. The consumer pull on their burgers and fries or mici here in Romania, is very powerful and as long as everything is available when you approach the counter you will buy and be wished a nice day. They do not always get it right though as I noted a few months ago.

Not so long ago Supply Chains were considered to be just an annoying cost on the books but no so now. Those companies that have invested in Supply Chain people, processes and performance are clearly reaping the benefits.

Image courtesy of Stuart Miles at

Tags: FMCG, Dave Jordan, Performance Improvement, Telecoms, Pharma, Supply Chain

Integrated Supply Chain Planning – 1 Reason Why It Is Difficult

Posted by Michael Thompson on Mon, Apr 14, 2014
In my previous two blogs on the subject, I outlined how producers (manufacturers) can achieve very significant improvements in the financial performance of their supply chains by a process of integration between the primary and secondary supply chains (Integrated Supply Chain Planning – The Number 1 Opportunity). I then described how to achieve focus when considering global supply chain integration programmes of this type by looking at different market profiles (Integrated Supply Chain Planning – 4 Opportunities and 2 Quick Wins).

This raises the following question.  If the opportunities exist (they do), and they are so significant (they are), and the process of achieving the success is well established (it is), why have more companies not simply gone ahead and implemented these changes?

The short answer is that some companies have. However, many haven’t.

There are several explanations but actually only one real reason.

To integrate the primary and secondary supply chains almost always involves the co-operation of two company departments – supply chain for primary and commercial (sales / trade marketing) for secondary.

Let’s look at the proposition from the point of view of the Supply Chain Department.  The key benefits relate to lower inventory and that’s a good thing for a Head of Supply Chain.  Integration benefits are long term and make for a more effective and responsive supply chain.

Now let’s consider Sales.  They will get fewer stock outs (higher sales - that’s good), more effective trade marketing (good again) and better deployment of product launches (also good of course).  So what’s not to like?
The problem is this – the lower inventory applauded by Supply Chain, is also a one-off reduction in sales, very much loathed by Sales.  It is only a short term one-off hit to sales.  However, that matters.  If, for example, stock is reduced by 2 weeks, that is nearly a 4% reduction in annual sales.  Such a reduction is simply not palatable for most Sales Directors or CEO’s.  
So we have the competing interests of the Supply Chain and Sales Departments, long term vs short term considerations.  Moreover, for multinationals we also have the competing interests of each market (and Country Manager generally bonused on sales and profit), regional and global Heads of Supply Chain (whose bonuses will include working capital tied up in inventory), regional and global Heads of Sales (only the top line matters for them), regional Heads responsible for regional bottom lines and so forth.

To achieve integration of the primary and secondary supply chains on a global basis, just about all of the above stakeholders (and more) will have to agree.  And the only person who holds sway over everyone is often the global CEO.

So it may come down to this.  If you want to integrate your business with that of your distributor in, for example, Nigeria, you may need the approval of the Group CEO.  And that is the number 1 reason why it is difficult.   
However, for those who think about the long term and are prepared to grasp this particular nettle, the rewards are plentiful indeed.


Image courtesy of

Tags: FMCG, Route to Market, Pharma, Michael Thompson, Supply Chain, Sales, Distribution, Inventory Management & Stock Control, Integrated Business Planning

Integrated Supply Chain Planning – 4 Opportunities and 2 Quick Wins

Posted by Michael Thompson on Wed, Apr 09, 2014
In my previous blog on the subject (Integrated Supply Chain Planning – The Number 1 Opportunity), I outlined how producers (manufacturers) can achieve very significant improvements in the financial performance of their supply chains by a process of integration between the primary and secondary supply chains.
The key is data exchange between the producer and their key distributors.
Given that global multinationals operate in a large number of markets and generally with a large number of distributors, the question of how to achieve focus becomes very important when considering global supply chain integration programmes of this type.

The opportunities from such integration are dependent on the particular characteristics of each market.  These depend on the following:

  1. Direct vs indirect distribution
  2. Proportion of sales via Key Accounts vs Traditional Trade
  3. Distributors characteristics in each market – their number, degree of exclusivity and competency, for example.
Now let’s look at different market profiles.  The integration opportunities can be summarised as follows:

Integration opportunities for different market profiles      
We can see from the above that there are four integration opportunities of which two are quick wins:

  1. Where a market is serviced via direct distribution (i.e. the producer undertakes its own distribution), the long term solution is to establish internal direct data interfaces with key warehouses.
  2. Where Key Accounts predominate (e.g. hypermarket chains in Western Europe), the long term solution is to establish direct EDI interfaces with Key Account customers.
  3. With markets where there is an exclusive distributor there is scope for Quick Wins.  This can be achieved by establishing a stock replenishment process at key distributor stock locations and ensuring that distributor stock data forms a key input to the sales forecasting process of the producer.  The data exchange to enable this process could if needed be manual in the first instance (for the most important “Category A SKUs” for example). In the longer term EDI interfaces can be established.
  4. In markets where there is no exclusive distributor, Quick Wins are still possible provided there is a relatively small number of significant distributor stock locations – i.e. where there is a small number of key distributors.  Integration can be achieved via a similar process to that above in No 3.

For producers, analysing their markets in this fashion will identify where opportunities exist including for Quick Wins.

I would be interested to hear of readers experiences with this type of supply chain integration … as it is often not as easy as it seems …
… but not for the reasons you may think.

I will explore this in my next blog. 

Image courtesy of Enchange Ltd

Tags: FMCG, Route to Market, Performance Improvement, Pharma, Michael Thompson, Supply Chain, Distribution, Integrated Business Planning