Вы находитесь на странице: 1из 23

28th International Conference of the

TOC Practitioners Alliance - TOCPA


www.tocpractice.com

9 November 2016, UK

Managing the Sales Flow


The TOC Way
Oded Cohen
Israel, Estonia
TOC Strategic Solutions
9 November, 2016

Oded Cohen
Oded has over 38 years of experience in developing, teaching
and implementing TOC methodology, solutions and
implementation processes working directly with Dr. Goldratt
all over the world. Among the countries to which Oded brings
his expertise are the USA, Canada, Japan, India, China, the
UK, Poland, Russia, Ukraine, Colombia, Chile, Peru, Turkey
and many others.
Oded has authored multiple TOC articles and contributed to
numerous TOC books.
Oded in the is the author of Ever Improve A Guide to
Managing Production the TOC Way, published in June 2010.
Oded co-authored the book Deming & Goldratt: The Theory
of Constraints and the System of Profound Knowledge The
Decalogue.
Together with Jelena Fedurko Oded has co-authored the
book Theory of Constraints Fundamentals.
Oded is International Director of TOC Strategic Solutions Ltd
oded.cohen.gs@gmail.com
and Founder and Co-President of TOCPA.

www.toc-strategicsolutions.com
www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Managing Sales Flow the


TOC Way - Definitions
Sales anything that the company sells to the outside:
products, services or partnership

The Boundaries
The entire sales flow - from the sales funnel: collecting
the leads of potential buyers until the firm customers
commitment is achieved: as customers order, signed
agreement etc.
Partial flow - In reality there can be situations in which
the process starts in an advanced step while skipping
some of the initial steps.
3

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Sales Flow
Sales
Funnel

Potential
Buyers
& Sales
LEADS

Step 1

Step 4
Step 3
Step 2

Step n

Successful
completion
of the sale

Sales
$
4

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Why and When does a company needs


to consider managing the sales flow?

The TOC experience tells us that the market is the


primary constraint of every system.
Sooner or later this constraint becomes a reality
Hence it is better to get prepared for it!
Therefore, our recommendation has been to start
managing sales the TOC way as soon as
possible, in parallel to building operational
excellence and developing the market offer(s) to
capitalize on it.
5

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

The special Characteristics


of the Sales Flow
High level of uncertainty exists in nearly every step of
the flow:
Raw Material is not always available
The outcome of the process is not fully defined
and known at the outset when starting the
process
Some of the steps are performed by other
functions/departments which are not under the
authority of the sales person or the sales manager
The completion of some steps depends on the
reaction/reception of a third party - the client
The client can scrap the process at any time
6

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

The Reality of Sales Flow


The Conversion Rate

Sales
Funnel

The conversion rate presents the expected success


of moving from one step to the next and eventually
from Lead to Sale.
Companies that sales through
quotations and bids tend to track
conversion rate as a general percentage

LEADS
Step 1
Step 2

Step n

Many organizations do not record nor


keep track of the conversion rate.
Nevertheless, many systems contain
data that can enable tracking the
global conversion rate

Successful
completion of the
sale

Sales Target

GAP
Sales Booked
7

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Data needed for


Managing the Sales Flow
Data for planning and controlling the execution:
Step conversion in Percentage the probability of
moving fro one step to the next step

Time the duration that the opportunity is likely to


stay in the step until the successful move to the next

Touch Time is needed for steps that are


performed by critical resources

Money the expected amount of money that is likely


to be sold at the end of the process. Money should
be recorded both in terms of the value of the sales
and the expected Throughput

Card the term that is used for denoting an opportunity


8

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Managing Sales Flow


the TOC Way
Can we use concepts and techniques from the standard
TOC Flow management solutions to manage the sales
flow?

Production MTO

Production MTA

Project Management

While some concepts can be used no solution can


be used on its own.
This is due to the multiple objectives sales must
achieve: Financial targets within time frame for
delivery while considering sales capacity
9

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Managing Sales Flow


the TOC Way
The suggested approach is to chose one of the solutions
as a base and to add to it elements from the other two.
Different cases:
For cases that each salesperson has many
opportunities that demand relatively short touch
time, we can use the MTA as the base
For few sales opportunities that take long time to
conclude, that have high touch time and demand
contribution of other functions we can use
CCPM as the base
For the rest we can use MTO with Diagonal
Buffer as the base.
10

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Sales Management
Based on MTA An example
The company sells personal pension fund though sales
agents that visit the potential buyers at their homes.
There are 15 agents. Some of them relatively new.
The company sets the target of 36 sales per quarter (12
weeks) for each agent. Targets are accumulative.
FG
RM
List of
potential
prospects
LEADS

Initial Call

Meeting 1
Face to Face
Meeting

Data
Gathering
And
Varification

Prospect
agrees
contract
signing

Closed
Deals

To use MTA as a base we need to calculate the sizes of the:


1. FG Buffer
2. RM Buffer
11

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Data for MTA based Sales


Management
List of potential
prospects
LEADS

Length of
stage

Initial Call

Meeting 1
Face to Face
Meeting

Data Gathering
And
Varification

Prospect signs
the agreement

1 week

2 week

2 week

3 week

Probability
of moving to
next stage

50%

67%

50%

75%

Criteria for
successful
completion
of the stage

Prospect
agrees to meet

Prospect
agrees on the
problem and the
direction that is
suggested

The prospect is
eligible for a
pension policy
and conceptually
agrees to
conclude the
technical details

The prospects
agrees to sign
the agreement
for the
pension policy

12

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Sales Management
Based on MTA The Buffers
Overall conversion rate =
12.5%

24/week

List of
potential
1
prospects
LEADS

WIP

3/week
Closed
1Deals

Average duration = 8 weeks

FG

RM
FG Buffer = 3x12 weeks = 36 Cards
Reflecting the quarterly target.

RM Buffer = 3/0.125 + 25% = 30 Leads


Assuming this quantity can be replenish in one week
13

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Planning the Flow - The Pipeline


How many cards should we have in
every step? (Stable view)
36
List of
potential
1
prospects
LEADS

RM

WIP Pipeline to ensure 3 sales /week

Initial Call

Meeting 1
Face to Face
Meeting

Data
Gathering
And
Varification

Prospect
agrees
contract
signing

Closed
1Deals

FG
FG
3

50%

24

67%

12

50%

75%

14

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Sales Management
Buffers Status
30 leads
List of
potential
1
prospects
LEADS

RM

3/week
WIP

Closed
1Deals

Average duration = 8 weeks

FG

RM Buffer Status as per the OH in the buffer


The status of the FG Buffer should be calculated as:
The ratio between the accumulative closed deals and the
accumulated target . For week n:

Target achievement [%] = Total Closed deals / (n x 3)


15

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Controlling The Pipeline


How healthy is it?
(Daily Meeting)

30

36

List of
potential
1
prospects
LEADS

Actual

24

Initial Call

50

Step Status
Step 1
Step 2
Step 3
Step 4

Meeting 1
Face to Face
Meeting

12

10

Data
Gathering
And
Varification

Prospect
agrees
contract
signing

G
24
12
8
4

Closed
1Deals

Y
18
9
6
3

R
12
6
4
2
16

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Controlling The Pipeline


The Overall Picture
(for daily and weekly reviews)
The table reflects the
health of the overall
pipeline.
Health is reflected in
the weighted total.
The table points sales
manager towards
areas that need
focusing.
Step Status
Step 1
Step 2
Step 3
Step 4

G
24
12
8
4

Y
18
9
6
3

R
12
6
4
2

Salesperson

Step 1 Step 2 Step 3

Step 4

Weighted

Total

A
B

12.50%
5
20

25%
0
0

37.50%
3
0

75%
5
4

13
24

10

G
H

Total

Target
Deals for
next
week
2
0

5.5
5.5
2.9

10

1.3

11

26

8.8

13

4.0

0
16

3
0

13
0

0
2

16
18

5.6
3.5

4
1

10

1.8

J
K
L
M

14
2
1
10

4
10
4
1

5
0
6
1

4
0
6
2

27
12
17
14

7.6
2.8
7.9
3.4

0
5
2
1

10

1.9

O
Total

10
107

4
44

2
55

0
27

16
233

3.0
65.3

3
40

17

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Yes, but
This view is not enough
The overall picture is based on
stock buffers. It tells how fat or
skimmed is the pipe line.
However, like in any stock
system some items may flow fast
while others may be slow movers
or even dead wood
Therefore, there is a need to add
another view that will give
management the sense of speed
within the flow.

Step 1 Step 2 Step 3

Step 4

Salesperson

Weighted

Total
Total

Target
Deals for
next
week

12.50%

25%

37.50%

75%

13

5.5

20

24

5.5

2.9

10

10

11

26

1.3
8.8

13

4.0

13

16

5.6

16

18

3.5

10

14

27

1.8
7.6

10

12

2.8

17

7.9

10

14

3.4

10

10

16

1.9
3.0

233

65.3

40

Total

107

44

55

27

18

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Managing Time
The simplest way to manage time is to use Time Buffer
Every step has a start and an end.
By tracing the time that the card is spending (or staying) in a
step we can calculate its age and colour the time buffer
accordingly.
Example:
Step 4
Expectation Duration: 3 weeks

Start

Week 1

Week 2

Week 3

Expected
Completion

Black - overdue

19

www.tocpractice.com

28th

International Conference of the TOC Practitioners Alliance - TOCPA

Sales Flow Buffers:


Stock (Cards) & Time (Age)
Salesperson

Step 1
Cards

Step 2 Step 3 Step 4

20

11

10

16

12

14

10

10

Total

107

49

13

Weighted

Total

Time Buffer
Y
R
1
2

G
1

Total

Cards

Cards

Cards

Cards

B
1

18

44

Target
Deals for
next
week
2

5.5
5.5
2.9

20

1.3

11

31

8.8

14

4.0

13

16

34

5.6
3.5

18

1.8

41

10

14

18

24

7.6
2.8
7.9
3.4

15

1.9

3.0
65.3

2
5

26

26

19

44

55

27

340

0
2

5
2
1

40

20

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Managing through the Buffers


Buffers provide management with the mechanism to:
1. Take recovery actions to ensure achieving the set results
using short and frequent meetings of management with team leaders
and individual salesperson.

2. Instigating POOGI - for improving salespeople capabilities,


level and quality service from other functions and upgrading the
system where needed.

Lost Cards opportunities that the process of selling has been


stopped, should be recorded with the reasons causing the
stoppage. The reasons should be analysed on personal level and
on the system level.
21

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Managing through the Buffers


Benefits:
For the manager:
Easy control over the process.
Ability to identify problems early
Focused communication with the salespeople
Ability to focus managerial effort where most needed
More realistic expectations
For the sales people:
Clear picture of current situation
Ability to identify potential problems and prevent them
Better communication with managers (quicker updates)
Focused efforts according to the buffer status
22

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

More on Sales Management


The Fleetguard Experience
http://tocpractice.com/ipapers/2016/04/25/st-and-the-red-curve/

23

www.tocpractice.com

28th International Conference of the TOC Practitioners Alliance - TOCPA

Вам также может понравиться