Lean Sales & After-Sales

Background

In sales & aftersales there is one common way to increase sales being applied all over the world and across all industries. This is often referred to as “The law of large numbers”. It states that in order to increase sales the most effective method is to increase sales activities throughout the sales process. This might in fact result in more sales, but gives little or no attention to how efficient the processes are.

Challenges

In sales & aftersales information is key to better serve your customers. Product/service characteristics, i.e. information, change frequently and rapidly. As a result decisions are often based on old information, which eventually leads to mistakes and/or process inefficiencies. Another major challenge is that waste is in these processes are rarely directly visible. Add to that the high number of organizational interfaces, often with unclear roles and responsibilities, dealt with on a daily basis. There are also many companies giving incentives to their sales people to sell products and services without regard to how this type of sales activity affects the company’s value streams.

One of the main challenges in sales & aftersales is changing the role of sales from just selling to the role of customer management, balancing the true needs of the customer with the company’s actual operational capabilities.

Focus Areas

Waste in sales & aftersales can be identified, classified and minimized thereby creating tremendous savings potential. Lean principles, kaizen methods, and reengineering approaches can be applied when making improvements to the sales & aftersales processes. Successful applications reduce the time spent to make a sale, improve the quality of the process, reduce the cost and ultimately result in increased customer satisfaction.

Areas of waste often identified in sales and aftersales:

  • Transportation & Handling: Travelling when making sales calls, excessive email attachments, multiple hand-offs, multiple approvals.
  • Inventory: Files and documents awaiting to be processed, excess promotional material sent to customers, batch processing of sales reports, stocked sales literature.
  • Movement: Looking for data and information, movement of people to/from fax to copying machine to central filing, lack of standards (e.g. looking for items because they do not have a defined place).
  • Waiting: Waiting to meet with customers, waiting for approvals, waiting for information (e.g. customer response on quotes).
  • Overproduction: Printing paperwork before it is really needed, making extra copies of reports or promotional material, writing proposals before they are required (e.g. unclear customer needs, just-in-case writing...), scheduling unnecessary sales calls/meetings.
  • Over-processing: Re-entering data (e.g. due to using multiple computer systems), travel expense reporting, month-end closing activities, writing complicated proposals.
  • Defects: Missed/cancelled sales calls/meetings, errors in proposal or information, extreme sales forecast inaccuracy, invoice errors, order entry errors.

Lean Solutions

Improving information quality, reducing complexity, avoiding silo mentality and focusing on the customers will improve the sales & aftersales processes, which is key to increase sales and delight customers.

We implement Lean Solutions in sales & aftersales in a similar way to other functions.  The solutions must fit the challenges.

Tangible Improvements

Lead Time
Lean route-to-market project reduced lead time from traditional grocery sales order taking to order delivery & invoicing by 60%
Quality
Lean optimization in FMCG sales processes’ information flow improved forecast accuracy in S&OP+ by 25%
Costs
Optimized medical equipment maintenance engineer route planning process increased after sales maintenance visits by 34%
New Lean process for standard inspection of medical equipment maintenance engineer increased after sales revenues by 27%
Lean home products merchandising processes reduced back room storage area needed by 50%
Working capital stock reduction program via Lean application reduced 5,800.000 USD p.a. worth of slow moving SKU’s in sales vans and trucks
Segmentation of trade for food distributor using Lean concepts reduced overall stock in trade by 53% while increasing sales by 39%

To learn more about Lean Sales & Aftersales solutions, contact Four Principles today.