Revenue generation, sales growth, and finding and retaining customers are the lifeblood of all companies.
It goes without saying that cash flow improves and customer satisfaction increases when customer jobs, orders, and products are quoted, processed, loaded, and shipped faster and more efficiently. Therefore, let us examine how an important Lean tool, Value Stream Mapping, deals with the elimination of bottlenecks and expedites the entire sales process from beginning to end.
Value Stream Mapping includes work sessions led by a Lean consultant with participation by company team members. The team consists of employees who collectively represent the process being mapped from beginning to end and help develop data and information about process flow and the system currently used. The information developed by the team is progressively compiled and depicted in a graphical Value Stream diagram representing the “Current State” process. Through this participative and interactive method, problems, root causes, and corrective actions are identified and described.
Using the Current State process findings, the consultant and the team then develop a “Future State” Value Stream Map, depicting an improved process. The Future State Map incorporates the operational requirements and improvement opportunities identified during the analysis of the Current State process. Upon completion of the Future State Map, an action plan is created with specific improvement activities for the team to implement.
Ultimately, all businesses are charged with growing sales; remaining stagnant means going backwards. Therefore, it is critical to all companies that customers are happy, that they gain new customers, and retain their existing ones. Here are some areas to consider:
- Gross margin: Some customers/segments generate higher gross margin dollars than sales dollars.
- Customer type: What customer types (I.e. OEMs, distributors, VAR, etc.) are the most profitable?
- Market segments: Like customer type, which markets are most profitable?
- Product types/categories: Again, which types/categories are most profitable? Are you selling all products to existing customers or just historical business?
- Salesperson contribution: Looking at each salesperson, examine areas such as the number of accounts, revenue, and margin. Maybe you need to hire more salespeople?
Just think about this. If there is a bottleneck anywhere in the sales process, your sales and profits will inevitable decrease. Most dangerously, you may lose customers to the point at which your company defaults and ceases to exist.
If you find the Lean approach of interest and believe Value Stream Mapping for sales growth may be applicable at your facility, a Lean consultant can visit you and review your needs at no charge. For more information, please call HVTDC Business Development Advisor, Ralph Brown, at 914-393-9876.