Whether you work in engineering, fast-moving consumer goods, retail or other industries, fantastic corporate performance is heavily dependant upon a robust and agile supply chain.
People who work in procurement, supplier relationship management, warehouses, logistics, planning, demand forecasting, stock management roles etc. take a bow; you make organisations work. Having worked in multiple sectors, one thing that persists across all organisation is getting the right product, in the right place, at the right time and at the right price.
" Without data, your just another person with an opinion” – W. Edwards Deming
As the famous saying goes, we should not ask what you do for the organisation but what the organisation can do for you. I believe that the providing high quality, timely and accurate information to colleagues involved in all aspect of the supply chain is a crucial tool when considering supply chain optimisation. It is not about pretty reports or flash dashboards; prioritised, actionable instruction is what our supply chain colleagues demand.
One of the key reports used in retail is the Weekly Sales, Stock and Intake (WSSI – pronounced “Whizzy”). At a high level, this report brings together:
One of the key facets of the report is the ability to summarise, dice/slice, drill and alert information included in the WSSI to forward predict stock outages, variance to budget and margin erosion to allow corrective actions to be planned and completed.
The ability to burst the report by team naturally puts the right information in the hands of the individuals required to take action, creating accountability across the process. Furthermore, we all know that change happens, unpredicted hot sellers occur, missed targets are a fact of life, and agile budgetary re-alignment is a necessity.
The ability to drill up and down the product hierarchy, highlight stock hot spots and re-direct underspend to more active lines is the constant reality of achieving optimum performance. Furthermore, sourcing delays can have knock-on impact beyond a stock outage. Are marketing targeting campaigns based on the delayed product? Is this taken into account when chasing down suppliers to remove bottlenecks?
Although the WSSI is a key management control document in many organisations, without governance and the right controls it can get lost in the plethora of management reports many organisations generate.
One of the beauties of the WSSI, is that the actions taken this week will be reflected in the report next week. For example, placing a committed purchase order to plug a future week stock gap will have a visible impact on a re-run report. As a living, breathing, working document, this helps encourage people to follow a process and adopt best practices.
The WSSI is not a static, nice to know, boring report; the WSSI can help organisations genuinely deliver better performance. Organisations should take note of culture and processes that build up around the WSSI report; it is an excellent example of the panacea promised by MIS investment, the business need for “actionable intelligence”. In simple terms, the WSSI helps promote good practice across the organisation and is a shining example of the need for training, standard operating procedure updates and adoption strategies to accompany all MIS projects.
Although the WSSI promotes best practice, supporting documents are also needed to bring focus to each element of the supply chain. One example is stock age analysis. You can argue that the WSSI will pick this up as sales variance will occur if items are not selling but analysis of stock age is often helpful to bring focus to tied-up working capital. Scanning stock based on purchase order date is an easy way to understand the age profile of stock - this can be used to review the need for promotional discounts, clearance activities and ultimately disposal. A high-quality Aged Stock Report will help support such processes.
One of the other things to watch out for in your WSSI process is the ability to keep targets in your sights. Your budgeted sales target should remain intact and cast in stone. Adverse sales variance will usually cause the weekly demand forecast to downsize the future sales prediction and failure to react to this can lead to overstocking.
Preserving the original sales target, allowing the demand forecast to learn from and react to actuals but also creating a mechanism for the team to “re-baseline” needs to be built into the WSSI governance process. Providing the ability to work on the new baseline in “offline” mode, review and then commit the new figures is key to avoiding a stale understanding of performance. The ability to do this across the whole department creates a need to concurrent multi-user updates.
I have worked with organisations that have implemented this process using large and expensive, dedicated packages and others that rely on a plethora of Excel spreadsheets with the associated difficulties of bringing data together.
The reality is much of the information needed to construct a robust WSSI type process already exists in your organisation, and it needs to be copied into a central repository and enriched. Rapid development, combined with practical common sense, can often be brought to bear to get the necessary WSSI reporting structure up and running quickly.
The accompanying business process to “act” on the “intelligence” could take a bit longer but my advice is to start simple, get the processes embedded and to treat the WSSI as a game-changing process, not just a report. Furthermore, although the WSSI is a retail view of the world, the principles apply to many other sectors.
Crimson have a tried and trusted 4-step processes to enable an organisation to capitalise their data assets that avoid IT jargon, remaining focussed on business need. These are four steps:
I am hopeful that this blog post gives some insight into the reasons why our customers invest in data, but without a good understanding of why my advice is don’t start. However, if you wish to engage Crimson in a free consultative workshop to help bring clarity to your thinking, you can follow this link and register your interest in Crimson’s free Data Pathfinder Workshop.