The Cucumber Sandwich

Sorry for not updating my blog, but I am writing a book at the moment about my life in the UK. I guess it will be finished at some stage in July. And then I shall be back.

The book is called: "Dont mentschen ze var - a German on his Search for the Cucumber Sandwich".

KPIs of SCP

SCP has a few KPIs by which one can see how well (or not so well) they have done.

Customer Service measured as Customer OTIF (On Time In Full). This KPI measures the orders a customer wants at what date with the ones actually delivered on that date. Whether these should be orders or order lines needs to be decided case by case.

Internal OTIF from factory to distribution centre (also called Factory OTIF). This is a shared KPI with SCO and measured the weekly planned orders with the actually produced orders which enter the distribution centre for distribution to the customers. This is more interesting in an MTS (Make To Stock) environment where SCP would be responsible for reorder points, safety stock, etc, as MTS orders are mainly generated by SAP or any other production planning system.

Stock. These stock KPIs can be expressed in total nominal stock value (raw material, finished goods, work in progress, packaging, goods for resale) or days of stock/inventory. Also, obsolete stock should be measured.

The Role of SCP (Supply Chain Planning)

The main task of SCP is to manage the forecast, plan and communicate, whereas it needs to be decided case by case to which amount and detail the planning part is to be undertaken.

I am perfectly happy with the minimum planning as in output planning, a wish list of which products need to be in the distribution centre at what date. Some planning departments also take over the whole of production planning (scheduling) as in scheduling which product needs to be produced at which line on what day, etc... I truly believe though that this kind of planning should remain within operations (more detail later).

Talking about communication, SCP should bundle the information which gets from the front end (sales and marketing) to operations. Nobody should be allowed to get in touch with operations but SCP.

And, SCP should manage the forecast of Sales and Marketing and allow operations (SCO) to plan resources.

What if...?

What can happen if the operations department does actually do the thinking job and decides for themselves?

- Operations people normally think big, which means, the bigger the batch/lot size, the better for the fixed costs degression.
- They are not enough informed about the market and should solely concentrate on production/operations efficiency.
- Being focused on short term production results, they tend to neglect to look at the long term when it comes to planning and forecasting.
- Too many interfaces (inside and outside communication) distracts them from their real job - an efficient operation and delivery on time and in full.

There are more reasons, but these are the most important ones.

And now for future reference, when I say 'operations' or 'SCO', that actually means Supply Chain Operations. This is the department in the supply chain which "does" things, and that can be usually production, distribution, etc...

The Brains and the Hands

Talking Supply Chain I'd like to start with the model. Like in many areas it is advisable to separate the "brains" from the "hands", which means, don't let the doers decide what they should do and how much. That never ends up at an optimum.

In a project I am always open for suggestions and agree happily on some alterations to the model and tools which I intend to implement, but on that issue I categorically stay tough: NEVER LET PRODUCTION DECIDE WHAT, HOW MUCH AND WHEN THEY HAVE TO PRODUCE SOMETHING!!!

What's now?

I ranted on enough now with most of my projects I was involved with. Chronologically, it is 2003/2004 now. Since then I have worked for my main client in their supply chain. Initially, we implemented a lot, now I am mainly working on re-implementation and amelioration of the installed systems.

What I generally do and did for my client: I would go to a business unit, and they are organised worldwide, analyse the situation, come up with recommendations for improvement, built a business case, and install the improvements. I mainly work in supply chain planning departments, factories and distribution centres.

The countries I have been involved with so far with this client: The Netherlands, Belgium, France, South Korea, China, Hungary, Poland and a tiny bit of UK.

What I want to do from now on in the blog is to write a bit more about the tools and methodology I used in the last couple of years.

Just a few pics of Anne-Laure, Javier, and myself in the project room.