It needs to be said again! All of these possibilities are just that. Before you decide to focus on any one of them you must first determine what your limiting factor or constraint is and what you want to get from your limiting factor - decide how you want to exploit it. What you read here are possibilities (in the absence of a real organisation) - so analyse and choose well. Addressing many of these possibilities id NOT the way to go. Try that and it will be a long time before you get bottom line results - unless you are very lucky! When we discuss engineering and project management a key action (if projects/engineering are your constraint) will be to stop multi-tasking.
What follows are the rest of the sales/marketing improvement opportunities I have decided to discuss.
Is Sales and Marketing or the Market your Limiting Factor? - 2
- So far we have discussed ways to increase sales through new business gains. You have however; existing customers that should, because of your excellent products and performance, continue to buy from you. The rest of your business can impact this existing repeat business considerably. Poor due date performance, long lead-times and other factors will eventually cause customers to look elsewhere. Poor operations performance wastes the sales organisation’s time as the must console disappointed customers. The more severe an operations problem is, the more sales time is wasted and the more customers are lost.
How good is your operation’s performance? How often must sales get involved to fight to maintain good relations with customers in order to not lose future sales? What % of a sales person’s annual hours is spent protecting existing business due to some inadequacy or mistake made in operations?
If it is relatively easy to maintain market share despite relatively poor perceived performance by operations; then we can conclude that your competitors have equally poor operations. This indicates you have the potential for a competitive advantage vs. your competition – something that can help the sales organisation massively. If your industries poor performance damages clients – by forcing them to hold high inventories, by making their lead-times long and unreliable etc., then the potential from an operations competitive advantage is even greater.
Does your sales organisation understand the consequences of your industry’s poor performance? Can the value the damage caused to clients? Can your organisation (sales and operations together) take advantage of this opportunity?
- A decisive competitive advantage would help increase sales dramatically. Most managers would likely claim that such a decisive competitive edge is not easy to imagine, let alone realise. However if any of the situations described below were realised, would they lead to such an advantage?
- The organisation is able to develop and launch significantly more new products than currently – at a rate faster and with shorter lead-times than any relevant competitor can.
- Delivery performance is nearly perfect – products and projects are almost always (nearly 100% of the time) delivered on time or early (if that makes sense).
- Lead-times are considerably shorter (by 25 – 50%) vs. all valid competitors. This advantage includes the due date reliability mentioned under point b.
- In make to stock environments availability of all stocked products is nearly perfectly reliable – when a client wants to buy the desired product is immediately available.
- The company can produce significantly more (20 – 50%) without adding resources.
- The company can deliver the above performance with much less inventory in the supply chain (raw materials, work in process, finished product).
When you consider the above 6 items that, if achieved, probably will lead to a decisive competitive advantage (at least a competitive advantage) then you must ask yourself how can this be done? If it can be done, why has it not been done? Organisations have achieved the kind of improvements described, so there is evidence that at least some companies have made the improvements outlined and have gained the hoped for competitive advantage. Whatever your experience, it is possible. 2 of the key changes a company must make are: a) prevent the organisation from optimising every department or function. In other words the company must opt for global optimisation vs. optimising everywhere; and b) the amount of work in process must be limited so that everything flows – projects, production, the sales funnel etc.
Can your managers envisage that some or all of the above would give your company a decisive competitive advantage. If you cannot, would you like to speak with someone that can show you the way to such a solution?
Should you pursue these opportunities be careful that you do not try to implement all the ideas at once. I you do work in process will be too high and ‘nothing’ will get done. Results will take so long to achieve you and your employees will lose interest – its just another one of those improvement initiatives that does not work. So, select the order in which you want to implement and then implement and complete the highest priority initiative first before starting the next one. Make sure your people are not impeding flow by multi-tasking. Make sure work in process is at a level that supports a fast flow of work towards completion. Get results quickly!
My Dog!
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