Sales & Operations Process Improvement
Supply Chain - Marketing Strategy Research
Sales-Estimating Strategy Analysis  

May 2011  
In This Issue
Professor Mitch's Ph.D Research
What is Mitch Doing?
Six Sigma Sales Analysis
Greetings!

 

This is the last of our Six Sigma in Sales & Marketing applications case studies.  The January E-newsletter case-studied analysis of sales representatives performance and in March we reviewed pricing.  At this same distributor we analyzed the performance and productivity of their estimators.  It turns out that estimators have a significant impact on sales, profitability and close rate.    


Sincerely,

Mitch Millstein & Ray Davis
Ph.D Research PictureProfessor Mitch's Ph.D Research
I believe I told everyone that last year I returned to school to earn a Ph.D in Supply Chain Management from the University of Missouri in St. Louis.  My research will center around understanding and overcoming the gap between a company's capabilities and how it goes to market. 

Any thoughts, feedback, examples or questions please let me know.  
Supply Chain Process Flow MappingWhat is Mitch Doing?
I am working at a defense contractor Client, streamlining their supply chain management processes.  We will definitely do a e-newsletter on this project.  The team identified 46,000 hours per year of wasted steps.  The future state completely changed their planning and purchasing processes. 

We are working with them now on their proposal development and program kick-off processes. 
Sales-Estimating Strategy Analysis

Lean Six Sigma Tools
Cause & Effect Diagram
Performance Scorecards
Scatter Diagram

 

  1. We started the project with a Cause & Effect Diagram of everything that impacts sales and close rate.http://www.supplyvelocity.com/files/Estimator_Inside_Sales_Analysis_March_2011.ppt
  2. This e-newsletter will focus on estimator effectiveness, which the team felt could be a significant area for improvement.   
  3. The next step was to create the key performance metrics of the inside sales / estimator group.  They had many of the same measures as the outside sales force, which meant they were in alignment.  Companies talk about culture and alignment, but without aligned performance measures, it won't happen.   
  4. The remainder of the project used simple correlation analysis to understand the effectiveness of the inside sales / estimating team.  We discovered high performers, which was not apparent to management before this analysis.  
  5. Slide 3 is $ quoted versus $ close rate.  Slide 4 is the number of quotes versus unit close rate.  
  6. At this company, estimating involved design and engineering calculations. Slide 5 summarizes our findings.  We used Jordan as a benchmark for training other estimators how to be effective.  In this case copying the methods of one estimator, who was out-performing without anyone knowing it, was the secret to improving estimating performance.