Do you need help packing?
She was busy unloading our supermarket trolley onto the fast moving belt. But I was in charge of packing the bags. And I was keeping up with the cashier, who by now was moving so fast she was creating her own weather system!
Then it fell apart. Having joined me to offer what I thought would be a helping hand, my wife started emptying the bag I had just finished packing. Out came the chicken breast. And the toilet duck. Apparently, the fact that they neatly stacked beside each other was not a good enough reason to put the bread and the bleach in the same bag. Apparently, mixing food stuff with cleaning products was criminal.
Which brings me to this month's topic: product families. Of course your company's products are structured in clever groups and lines. I'm sure every conversation, every report and every computer screen rigorously uses these hierarchies. Yet from a supply chain viewpoint, they are completely useless!
It does not necessarily make sense to plan products in the same way, just because it was logical for sales and marketing to put them on the same page in the brochure. ABC-type classifications on the other hand are designed to recognise that some items sell in high volumes and margins, while others don't. It might be the same content conditioned differently, but it means a different set of policies for stock cover, replenishment frequency, and manufacturing batches.
Your supply chain needs the product classification it deserves. ABC groups must be the reference point for sales & operations planning. Groups must link to customer service targets and demand volatility. The time has come to re-pack the shopping bags
Hugh Williams is founder of supply chain planning specialist consultancy Hughenden.
