Delivery System Efficiency

“There can be economy only where there is efficiency.” – Benjamin Disraeli – Famed British Statesman

Last week’s blog focused on delivery system capacity. You must have enough production capacity to produce what you sell. But before you run off and spend precious capital on additional equipment and resources, it’s best to analyze how efficiently your current system is running. An efficient delivery system will yield higher profits without extra expense.

So how do you know if your current delivery system is operating efficiently?

Find the Bottlenecks – Almost every system has a component that slows down the entire production process. The first step is to find those bottlenecks and decide how to handle them. Let’s say you have a production rule that a senior manager has to sign off on all filled orders before they ship. What if that person is out sick or on vacation? How much time does it take to perform this task? Can this job be delegated to someone on the production floor? Can the system generate a report that can be emailed to the manager at certain times in the day? Find your bottlenecks and see if there is any way to eliminate them.

Is the Staff Working at Peak Performance? An efficient system is only as efficient as the people working it. Is your staff giving you 100% effort? Have you studied industry averages for producing your product? How would you know if your people are working hard?

Specific and Measurable Targets – In answer to the previous point, you need specific and measurable production targets in order to tell if your system is efficient. How many units per day? How many orders filled? What measurements can you put in place that would tell you that you are operating at full speed? How often should you measure for them? Good reporting is a hallmark of the efficient delivery system.

Incentives – A good way to keep the production team operating optimally is to have some games or incentives in place to reward them for good performance. If we make our quota of 1,000 units per week, everyone will receive a Starbucks card. Individual goals and quotas are great ways to measure for outstanding performance and identify who really has company interests at heart. A more motivated production staff will tend to be much more efficient, creating more profit for the company in the long run.

Is the Product Profitable? – Are you producing the product as profitably as possible? When was the last time you looked at vendors or re-negotiated materials pricing? Could you be getting your material cheaper? Could you be outsourcing one of your processes that is currently a bottleneck? Is it cheaper to do it somewhere else? An efficient delivery system should maximize the profit potential for the product.

Lots of companies are trying to be lean in these challenging economic times. The best way to approach efficiency is to start by analyzing your current system and looking for ways to improve what’s already there. A re-energized production team that’s clear on the company’s intentions and their role in achieving them is bound to be more efficient and more cost effective. These days, that’s half the battle if you’re going to win the game of business.

Are you ready to win?

Delivery System Capacity

“The secret of success is to do the common thing uncommonly well.” – John D. Rockefeller

One of the most important components of any company’s delivery system is capacity. You can only deliver as much product as your operation can produce, and that capacity threshold will impact not only your profitability, but your sales. It’s crucial that every business owner, manager and sales person understand production capacity. Here are some key things to consider:

Capacity Must Meet Sales Intentions – Sounds simple, but it’s often the Achilles heel of many companies. Management sets sales goal and intentions that far exceed what the production team can physically produce. If you are setting unprecedented sales intentions for your business, you must be prepared to acquire the necessary resources to produce the product at that level. Can your current production system accommodate a sharp increase in demand?

Capacity and Percentage Sold – It’s very important that production and sales meet regularly to monitor available capacity. If your production capacity is 100,000 units per month, and your sales team has already sold 85,000 units, you only have 15% remaining capacity. Another order for 30,000 units will create a backlog that will frustrate customers. Sales and production must always be planning for upcoming orders and how they will fit into the available capacity. Either that, or management must be prepared to do what it takes to increase capacity so that there is no backlog.

Manage to Customer’s Expectation – Your production system must be able to produce product to meet the customer’s expectations in terms of features, timing and service. The sales team should not make a practice of over-promising beyond what production can reasonably deliver. If the customer is expecting 10,000 red and blue units in 7 days, they will not be delighted to hear that they can only receive 7,000 blue units in 10 days. Production has to operate to the customer’s expectation, but sales needs to appropriately communicate that expectation.

Getting the Product Out the Door – It’s one thing to produce 10,000 red and blue units in 7 days, it’s another to get them safely to the customer. Production capacity doesn’t stop with manufacturing the product. Timely physical delivery to the customer is just as important. Do you deliver the product yourself? Do you rely on outsourced shipping? Who is responsible for making sure the product reaches the customer in good shape – sales or production? Your company’s system and capacity for getting the product to the customer as promised is essential for customer satisfaction.

Don’t leave any of these steps to chance. Clearly define delivery responsibilities at every stage of the production process. Consistently monitor your production capacity so that you are prepared for all orders and can anticipate breakdowns in advance. Always advocate for collaborative communication between the sales and production departments. Companies that go the extra mile to meet the customer’s expectations will reap the rewards of repeat business and good word of mouth. And that’s a winning formula for meeting sales and profit goals, even in the most unpredictable of markets.

Are you ready to win?

Designing a Delivery System

“You have to manage a system. The system doesn’t manage itself.” W. Edwards Deming

Our current blog series focuses on delivery systems. If you can get your product or service into the hands of your customer efficiently and effectively, you are creating an excellent customer experience that will have them coming back for more. As we said last week, you can have the best sales staff in the world, but if you can’t deliver the product, sales becomes meaningless.

So how do you start to design a top notch delivery system? The first step is to determine where you currently stand in terms of getting your product out the door. One of the best tools for analyzing your current system is our old friend the SWOT analysis. The SWOT analysis gives you a picture of your strengths, weaknesses, opportunities and threats, and helps you to rate yourself in some key areas:

Production Capacity and Capability – Take some specific measurements of your current system. How many units can you produce in a day? How quickly can you get them out the door? How many production errors do you allow for? How much extra capacity do you have to handle big orders? Is your work flow seasonal? Take time to analyze your capacity and how well your production staff are performing.

Getting Out the Door – How does your team do at getting the product out the door? This is really an efficiency question. Are you getting the product or service from your shop to the customer as quickly as you can? When was the last time you analyzed shipping methods and costs? Are there any gaps in your production process that could be tightened to speed up delivery? Does your company handle physical delivery or do you sub contract it? Who is responsible for making sure the product gets to the customer as promised?

Production Flexibility – This is another key barometer of your delivery system’s success. How flexible is your production system? Can you respond quickly and accurately to special orders? Do you know where you draw the line between what you will and won’t do? And can you measure for how those changes affect your profitability? These are all important questions when designing an effective delivery system.

Sales Flow – What does the path from sales to production to the customer look like? Who is responsible for what along the way? How do you follow up with the customer once the product has been delivered? This flow from the sale to the delivery is critical to the success of the customer experience. And a good customer experience is what improves your chances of repeat business and good word of mouth.

This week take a look at the key components of your delivery system. Analyzing what things are working and what aren’t is the first step toward designing a system that will be cost effective for you and that will meet your customer’s expectations. And we all know that happy customers are a big part of winning the game of business.

Are you ready to win?

Keys to Effective Delivery Systems

“It is through cooperation, rather than conflict, that your greatest successes will be derived.” – Ralph Charell – Business Book Author

We just completed a series of blogs on sales and marketing plans. A well thought out and executed sales and marketing plan is essential for any business to be profitable. But even the best sales and marketing plan is worthless without a delivery system to back it up. You can sell millions of units of a product, but if you can’t get it to the customer, you are playing a losing game.

How do you develop a delivery system that will appropriately support your sales efforts and seamlessly complete a positive customer experience? Here are a few things to consider when you create your delivery system:

An effective Delivery System requires coordination between Production and Sales to fulfill the customer’s expectation. – This is the essence of the delivery system conversation. Both Production and Sales must be aligned on their commitment to represent the company in the marketplace. They are interdependent players on the same team. Each has a specific role to fill, and they must communicate and work together to make sure the customer is getting what he wants, and when he wants it.

Production must be clear on what is and isn’t possible and communicate that to Sales. – The Production team has a responsibility to the Sales staff to be clear about what is possible. How many units can they produce? How quickly? How much flexibility do they have for special orders? If Sales doesn’t have a grasp of what they can sell, the result will be unhappy customers.

Sales must understand production capabilities and communicate those to the customer. - The follow up to the previous point is that the Sales staff must be able to articulate to the customer what’s possible. Sales should only promise things they are positive that production can deliver.

Both sales and production must be willing to explore creative solutions to customer concerns. – A good delivery system depends on Sales and Production being allies in the effort to produce products and services that customers want and that satisfy customer concerns. Depending on your business, there will always be times when sales and production need to think outside the box. Maybe production can create the product in a special color. Maybe Sales can work with the customer to agree on a delivery schedule that insures a successful and well-made product. Creativity and a willingness to partner together go a long way toward fostering happy client relationships and driving the company to profit.

Have you reviewed your company’s delivery system lately? Are there times when your sales and production teams see themselves as adversaries instead of allies? What can you do to design a delivery system that will insure that the customer is satisfied? If you would like guidance on how to create an effective delivery system, give us a call. We’ll help you find the win-win solution that works best for your company and your customers.

Are you ready to win?

Individual Sales Objectives

“A salesman minus enthusiasm is just a clerk.” – Harry F. Banks

Sales and Marketing plans need to reflect both company-wide objectives as well as the individual salesperson’s goal numbers. Both corporate and personal goals should align with the company’s profit intentions. Last week’s blog spoke to the company objectives. This week we will look at how to craft a sales and marketing plan for the individual salesperson.

Here are some key elements of a personal sales plan:

Marketing Tasks – Marketing tasks are things like networking, sending e-newsletters, blogging, and doing internet research to find prospects who have a high likelihood of buying your product. Without this kind of legwork, salespeople are hard-pressed to find those ideal clients.

Sales Actions – Sales actions include setting appointments, meeting with clients, preparing proposals, presenting the product, closing deals and following up. Each of these actions must happen consistently, and they must be scheduled into the calendar. Sales people who present proposals, but don’t follow up or close the deal are not going to meet their objectives. Break your sales effort into specific actions like these, and determine where those are going to appear in your calendar.

Accountability System – Salespeople need accountability systems if they want to stay on track to meet their goals. Who holds the salesperson accountable in your company? Is there a sales manager? A production manager? Who is responsible for tracking the progress and offering support to the sales staff? Is that chain of command clear to the salesperson?

Existence System – This is something the salesperson needs in order to be disciplined about performing the sales and marketing actions that will result in sales. The most common and best existence system is a calendar. Scheduling sales and marketing actions into an Outlook calendar gives one a picture of future results. A weekly sales meeting is another kind of existence system, as is a visual chart or graph that plots the salesperson’s progress toward his goals. Existence systems require some discipline, and it’s best if they have visual components that are easy reminders of where you stand.

Proposals – What kind of proposals do you need to have to present to clients? Maybe yours is a simple pricing sheet that you discuss over the phone, or maybe it is a highly detailed and customized PowerPoint presentation that you will deliver to the board of directors. Either way, it’s essential to have your materials prepared and be able to articulate how your product or service will be able to answer the prospect’s concerns.

Ongoing Training and Support – A salesperson should never feel like an island, separate from the company and colleagues and left to sell without direction. Salespeople should continually receive training on product capabilities and new ways to reach out to the marketplace. Salespeople also need to understand where to go for support when customers have complaints, questions or special requests.

The salesperson is often the embodiment of the company’s brand and reputation in the marketplace. Salespeople need clear individual objectives and well established channels for support. Businesses need to manage for personal and corporate objectives so that salespeople can distinguish themselves in the marketplace and deliver on the company sales intentions. A winning plan will yield winning results and will keep your business on the leading edge of the game of sales.

Are you ready to win?