Section V. Not Enough Sales


V. Not Enough Sales

Overview

Every business would like more sales. This naturally falls under the realm of Six Sigma for Sales/Marketing,[18] which will not be covered here in detail. There is, however, a simple approach using the standard Lean Sigma roadmaps that can help too.

[18] Six Sigma for Marketing is a new field at the time of writing. For more details, see www.sbtionline.com.

Examples

Any business that sells to external Customers (i.e., virtually every business).

Measuring Performance

Standard measures of sales here are applicable (e.g., numbers of units, volume of product, etc.).

Tool Approach

There should be a quick look at validity of the sales metric; a sound operational definition and consistent measure versus a detailed investigation of Gage R&R will suffice. For more details see "MSAValidity" in Chapter 7, "Tools." Mostly it's just a case of getting the data from the right source.

Take a baseline measure of historical sales as defined in the preceding MSA step. This data should be straightforward to obtain. It will probably be useful to get the data stratified by entity type, as well as the total sales volume. Use a sales period of 312 months.


The most common mistake in this type of project is to look to the wrong process for solution. The solution lies not in the internal marketing/sales processes, but instead in the customer decision process.

However, before examining any external processes, it is probably best to consider other Problem Categories first to identify where more readily accessible possibilities for sales growth might exist. This will require a data collection as follows:

Take a baseline measure of

  • Level of demand measured as Takt

  • Throughput (capacity) measured as Process Cycle Time

  • Lost sales measured as a percentage versus total (stratified by major causes)

  • Order cancellations measured as a percentage versus total

  • Sales backlog measured in days

If Process Cycle Time is greater than Takt, acquiring extra sales is irrelevant because operations processes cannot meet existing demand. Focus should be on increasing capacity.

Go to Section B in this chapter.

If sales are lost due to the lead times quoted caused by lengthy backlogs in orders, focus should be on reducing the backlog.

Go to Section W in this chapter.

If the Process Lead Time is too long, causing lost sales (without a backlog of orders being present), the process is just not responsive enough and the focus should be on reducing the Process Lead Time.

Go to Section G in this chapter.


If the preceding Problem Categories aren't pertinent and the need is simply to sell more, the focus should be turned to the Customers' decision-making process.

The scope should be defined as being from "the time the need arises" to "when the order is placed" (i.e., the decision is finalized).

In this case, use the Y=f(X1, X2,..., Xn) approach to determine the key Xs that drive the Customers' selection. The Y would be the dollars spent on our products.

Go to Section C in this chapter.

If the Customer is placing orders, but is canceling them later, this is a subtly different problem, but would follow the same roadmap. The scope should be defined as being from "the time the need arises" to "the time the purchase is solidified" (perhaps the product being used, or payment made or similar).

In this case, use the Y=f(X1, X2,..., Xn) approach to determine the key Xs that drive the Customers' cancellation. The Y would be cancellations.

Go to Section C in this chapter.





Lean Sigma(c) A Practitionaer's Guide
Lean Sigma: A Practitioners Guide
ISBN: 0132390787
EAN: 2147483647
Year: 2006
Pages: 138

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