PROBLEM
This month's case-study
Client sells transportation equipment, services this equipment and sells
replacement parts. The owner had
executed a successful growth strategy, and in a few years has grown by
400%. This is pretty incredible. But even more impressive, is that he realized
that his company had out-grown its methods.
He knew he had inefficiencies in his sales process, but didn't know how
to find and eliminate them.
His Sales process included
creating bids, configuring orders, installing options at his service-locations,
delivering and billing.
TOOLS
Performance
Measurement
Lean Selling Process
(Process Flow Mapping)
DETAILS: Performance Measurement
1) The focus of this
project was sales, so the Equipment Sales team created its Performance
Scorecard. As
we analyzed and streamlined the sales process we focused on improving sales,
gross profit and market share.
http://www.supplyvelocity.com/May_2009_Sales_Dept_Scorecard.xls
DETAILS: Lean Selling Process -
Identifying Non Value Added Steps
1) We used Process
Flow Mapping to understand the current state of the Sales Process.
2) We had a cross
sectional team including Sales Reps, Sales Support, Customer Service and
Accounting.
3) We then sorted the
process. Each step is evaluated and
given a colored dot:
Green - Value Added
to the Paying Customer
Yellow - Non Value
Added but Required by Legal, Regulatory, Safety, etc.
Red - Non Value Added
and should be eliminated
http://www.supplyvelocity.com/May_2009_Current_State_PFM.ppt
DETAILS - Lean Selling Process -
Eliminating Non Value Added Steps
1) We then listed all
Non Value Added (red-dot) tasks on the attached spreadsheet. You will see that most of them involved Sales
Representatives filling out information.
By mapping the process we found out that Sales Representatives were
doing all of the administrative work to close a deal... and they were all doing
it differently. http://www.supplyvelocity.com/May_2009_NVA_Eliminated.xls
2) Sales Reps are the
profit-generators for the company.
Giving them more time to know their customers better will increase
profit. We freed up Sales Rep time and
also standardized the process our client uses to sell.
DETAILS - Applying
Technology to Eliminate Non Value Added Steps
1) We also carefully
used Information-Technology to streamline the process. This company targeted information-technology
investments to improve productivity, speed and quality of their sales
proposals. This is a contrast to many other
companies that let technology dictate the process.
IMPACT ON PEOPLE
1) Sales Reps are an
independent group. Honestly, the first
year the Vice President had to push them to use the standard process.
2) After the first
year it became the way they did business.
Everyone in the company embraced making more money with the same
resources, and growing.
RESULTS & SUMMARY
The results of this
Implementation are clear and outstanding
1) We eliminated
601.5 hours of Non Value Added time in this company per year.
2) Even better, Gross
Profit % increased 40%! The additional
time Sales Reps have with customers and the standardized sales process resulted
in improved profit for our Client.
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