Improving Efficiency in Sales and Operations

Transcription

1 Improving Efficiency in Sales and Operations Presented by Mike Sheffield Wes Verno

2 Why adjust sales to improve operations? Flat sales trends High degree of complexity = higher cost of doing business Profit pressure from suppliers and retailers Being good stewards of the owner s resources

3 Contribution Analysis Portfolio Account Stop

4 Portfolio Contribution Too many SKUs Less is more Common Misconception Negative impact of operational efficiency by increasing time to: Receive Replenish Pick Count Deliver Merchandise You do not lose volume and GP $ of deleted SKUs You replace low performing SKUs with more productive SKUs

5 Portfolio Contribution idig Portfolio Contribution

6 Portfolio Contribution Develop threshold for keeping / deleting a SKU Draft Package Reduce the amount of people involved in the decision-making process Thoroughly review all SKUs quarterly Assign all Tier 3 suppliers with a SKU budget

7 Account & Stop Contribution idig Account Contribution idig Stop Contribution

8 80 / 20 rule Account & Stop Contribution Get away from painting the entire market with a single brush Allocate the right amount of resources towards each account based on legitimate contribution Sales model (pre-sell vs. tel-sell/tech ordering) Sales & delivery frequency Merchandising frequency POS

9 Managing Stops Gross Profit per Stop % of Perfect Stops Delivery Exceptions

10 What is Gross Profit? Gross Profit per Stop Wholesalers pay their bills with gross profit dollars, not sales dollars The first 75 cents of every dollar goes to the brewery The remaining 25 cents is what is left to operate the business

11 Improving Gross Profit per Stop GP $ / Stop = Total GP $ # of Stops Increase price of existing products Sell more volume Sell higher priced product (change the mix) Decrease the # of stops Example Account 10 CE / Wk * $5 GP = $50 GP / Wk $50 GP / Wk * 4 Wks = $200 GP / Month $200 GP 4 Stops 1x / Week Frequency = $50 GP / Stop Every Other Week Frequency $200 GP 2 Stops = $100 GP / Stop $200 GP 1 Stops 1x / Month Frequency = $200 GP / Stop

12 Impact of Managing Delivery Frequency Example: 400 accounts buy less than $200 / Week Current Delivery Frequency 1x / Week New Delivery Frequency Every Other Week Current # of Stops / Week 400 New # of Stops / Week 200 # of Stops / Week Reduced (200) # of Delivery Routes Reduced* (2) *Assume 1 delivery route can make 20 small stops / day

13 Gross Profit per Stop Available on many report including: idig Load Analysis idig Comparison idig Rolling Periods idig Custom Columns

14 Gross Profit per Stop Improve gross profit Change the mix Increase sales volume Manage the number of stops Develop a Service Policy How often each account will be serviced based on $ or CE volume Adjust regularly scheduled delivery frequencies to each account Manage off day deliveries Fix the root cause

15 What is a perfect stop? Sold Picked Delivered The cost of doing rework % of Perfect Stops

16 % of Perfect Stops idig Delivery Adjustments idig Custom Columns

17 % of Perfect Stops Define the right reason codes Eliminate unnecessary reason codes / miscellaneous catch all buckets Ensure all trucks are checked in correctly Fix the root cause of issues identified by repeat reason code returns For example: Not on truck - Delivery or Warehouse issue? Look for patterns - Same drivers? Pallets picked by the same night warehouse employee Check all product before it is loaded, eliminate pick error as a possibility

18 Delivery Exceptions Delivery is the most expensive thing you do Negative impact of delivery exceptions Decreases operational efficiency warehouse picking, additional miles driven, etc. Negative connotation of unscheduled work may lead to increased turnover Global view of all your deliveries Normal, regularly scheduled deliveries Unscheduled deliveries (off-day deliveries) Extra deliveries (additional delivery on scheduled delivery day)

19 Delivery Exceptions idig Delivery Exceptions

20 Delivery Exceptions Look for patterns & identify the root cause Where is the core issue (Sales, Warehouse, Delivery, or Account?) Fix the root cause Sales adjust the sales route, training, process adherence Improve the night warehouse training, checking, improving personnel Delivery adjust delivery routes / sequence / day, training Account management address the account decision maker Incorporate measurement into daily management processes

21 Balancing the Workload Stops & Volume

22 Stops & Volume When Stops are Unbalanced Delivery impact Low volume / high stop days can be longer and more difficult than high case volume days Lower cube utilization on the truck Warehouse impact Each stop is a trip around the pick line Lower cases picked per house When Volume is Unbalanced Have to staff to the peak Sell / warehouse / deliver / merch Typically 2 days / week are heavy Volume can swing 50% - 66% between high & low volume day Over-staffed on lighter days On heavy days More overtime Quality of work decreases Higher risk of injury Increase in call-ins & turnover

23 Unbalanced Workload CE Volume by DOW - Typical Unbalanced Example Example Wholesaler 30% 5,000,000 CE / Year Sells 100,000 CE / Week 35 Delivery Routes % of Total Weekly Volume 20% 10% 0% 15% Monday 15,000 CE Tuesday 20,000 CE Wednesday 17,000 CE 25% Thursday 25,000 CE Friday 23,000 CE

24 Negative Impact of Unbalanced Workload 15% 25% % Change Mon. vs. Thurs. CE Delivered / Day 15,000 25,000 67% # of 200 CPH % Cases / Delivery Route %

25 Balancing the Workload idig Custom Columns

26 Balancing the Workload Smooth out the workload Move cases AND stops Don t just move a bunch of tel-sell stops to Monday Move meaningful stops to low volume day Smooth volume between deliveries on 2x / week accounts Target 40% of total weekly volume on 1 st delivery Order low volume packages less frequently Send 3 cases once instead of 1 case on 1 st delivery and 2 cases on 2 nd delivery

27 Improving Efficiency in Sales and Operations Contribution Analysis Managing Stops Balancing the Workload

28 Learn more with Verno Consulting Verno s Beer Briefs Warehouse Efficiency Killers (free download) Delivery Efficiency Killers (free download) Service Policy Strategy SKU Deletions Part 1 & 2 Breakeven Cost Per Stop Sales Best Practices

29 Learn more with idig What idig reports sparked your interest? Request templates for reports in this presentation Visit the idig team on the Mezz Contact idig Support Portfolio Contribution Account Contribution Stop Contribution Load Analysis Comparison Rolling Periods Custom Columns Delivery Adjustments Delivery Exceptions

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31 Please complete the seminar evaluation in the UC app. Thank you!