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Component Manufacturing dverti$er
By Keith Parker Structural Building Components Industry Professional
April 2018 #10225 Page #66
Adverti$er
Don’t Forget! You Saw it in the
How the DMAIC Lean Method Can Be Applied to the Sales Process #7 in our Ready for Change? article series
Certified Lean Practitioner
L
ast month’s article, Using the DMAIC Lean Method to Accomplish Improvement and Take the First Steps to New Goals, used a case study to explore the DMAIC Lean method. This month another case study will be used to demonstrate how this process can be implemented in your business.
Case Study: The market has increased by 20% and your company has the capacity to take on additional work. The demand is there—but are you getting the opportunities and closing your share of the business? At the close of last year, the company sold ten million dollar’s worth of product at a gross profit of 32%. Your current sales are on pace with last year’s results. To sell additional work at a lower margin might not yield greater profits. Let’s tackle this together. What is your sales process? How will your company and sales team obtain the additional work? The work will not walk in—you have to go out and earn it!
The DMAIC method starts with … • Define—identify the scope of the problem and new goals. To increase sales by two million dollars to maintain the same percentage of market share yet achieve the additional work at the same or greater gross profits without hiring additional sales staff. • Measure—calculate current data and time to establish a baseline for each defined problem. Baseline measurement: $10,000,000 of sales and obtain $2,000,000 of additional sales at a 32% gross margin in 9 months. To increase sales, how many additional dollars will you have to bid? What is your closing ratio? How many additional contacts per week or month will you have to yield? • Analyze—determine a critical path that will lead to new sales objectives. What is your sales process? Are there ways to accelerate and streamline? For this case study, the sales team closes 3 out of 10 proposals, currently you prospect 2 new customers per week and can expect the current customer base to add 5% of additional sales to your tally. • Improve—develop a strategic plan to increase efficiency. Where is the waste in your process??? Lean is all about identifying and reducing waste.
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