Tuesday, 11 June 2013

Operations and Sales - Part 2: Creating a new culture and the role of Operations

In the second part of our interview with supply chain expert, Martyn Wilks, on the relationship between Sales and Operations in the building products sector, we discuss in more detail how to implement a new culture to allow the functions to thrive. We also cover the role Operations play to ensure it is a success.

You can catch up and read part one here

Implementing a new culture
The best way to bring about this kind of culture and structure change, is to strip back and question everything in your current processes to find out where the problems are, then establish a system that makes your customers happy, your Sales department happy, your Operations team happy, your Finance team happy and your competitors livid! 

If we go back to that often-repeated accusation from Sales “Why can’t you supply what we are selling when we have promised it?” and dig a little deeper, you discover how few companies operate and communicate in unity. Perhaps the Salesperson has a valid complaint to Operations and perhaps the Operations team has a valid reason to be frustrated at the demands from Sales. These problems are usually created due to lack of education, communication or effective planning as Martyn explains:

“In these instances, I look at on what basis the products have been promised.  Are they realistic and in line with the agreed lead-times and guidelines that Sales have been advised they can promise customers without conferring with Operations? If they were, I would question the robustness and quality of our system and make changes accordingly. If they were not, as well as questioning why the customer has been told something that is not possible, I’d also consider if what they are asking is feasible and necessary for the future and then ask: do we still need to question the robustness and quality of our system? That is a key point: always move forward and evaluate. However, it is equally important to address why the Salesperson has not acted as a team member by their actions”.

It is clear that confused messages to customers and lack of consistency within companies can cause major problems, even resentment and division between people and departments and needs to be avoided.

What should Operations be doing?
An Operations Manager/Director needs to make sure they are in control of what is being made and what is going out, rather than letting his team take total control, as otherwise the easy order will be picked by the Warehouse, rather than the larger one, the one that needs more time to prepare, or the one that is awkward to pick. This way an Operations Manager/Director is in control of what is going on and is able to react more quickly to emergencies, as well as knowing exactly what is coming off the production lines and out of the warehouse. However, as Martyn points out, this will slowly change over time, as it becomes more of a team environment:

“Although you always need to be in control and aware, once the process of communication and education starts to become enshrined throughout the company, all members of your team begin to take responsibility and become true team players. You are then able to rely on people to make decisions that are for the good of the company and the customer.”

Martyn thinks that the key to success in Operations is to have an effective Material Resources Planning System (MRP System) with its parameters established around a mixture of knowledge, facts and commonsense. Martyn has put together a list of considerations to assist Operations in the effectiveness of their planning process. 

A guide to success
Below is a guide for an effective planning system to improve the relationship. Although this is aimed at Operations, it is exactly the sort of areas and points that Sales Directors, Business Development Managers and National Accounts Managers should be aware of, and embrace and encourage in their new closer relationship with Operations.

Know the role of Sales and the needs of the customer and be involved
  • Speak to your counterpart in Sales on a regular basis and ensure that relevant people from Operations are talking with Internal Sales
  • Make sure you are involved/aware of new product launch plans and promotional activity or new business that might affect demand of any product
  • Attend key sales meetings and gain a better understanding of the pressures and processes of the Sales team and vice versa
  • Find out on what basis sales forecasts for production are being made and have an expert input at an early stage
  • Ask yourself if you know what customers actually want in terms of service. If necessary meet your customers to enhance your understanding and process
  • Make sure that you communicate to the customer any changes to the original agreement. This should be done as early as possible and preferably via the Sales department (internal or external)
Look at your systems
  • Ask yourself if your company’s lead times are realistic and evaluate on what basis they have been made and by whom. This is especially important when you move to a new company or position
  • Look at your maximum/minimum stock and re-order levels and how often you check them for excessive demand and review the norm
  • Know what you can actually achieve per day and how you can achieve it
  • Know what you need to achieve on each individual trading day and how you are going to achieve it
  • Strive to always deliver on time and in full
  • Know (and evaluate) where and what the potential process hold-ups are in order to successfully achieve the company’s goals
  • Look at the robustness of the purchase order/supply trail and if delays and errors are created as a result
Know your team, plan ahead and adapt
  • Know and evaluate what everyone under your control does in their role and what their value is. This applies to your staff and suppliers
  • If your team are making errors that cause problems to the customer, have a plan to prevent them happening again, eg picking errors, goods arriving damaged, goods being sent to the wrong place, substandard product being manufactured 
  • Evaluate if you have the right people, right machines and right processes in place and always consider if you need to recruit, make redundancies, change roles, or automate manufacturing/assembly, streamline operations, change packing materials and processes, evaluate transportation methods or improve IT
  • If possible have an alternative in place in the event of machine breakdown or a supplier letting you down
  • When required, consider if you need to employ more people or introduce overtime to meet demand
These points are geared towards meeting the customers’ requirements now and in the future and should to be addressed on an on-going basis, otherwise you will soon be back to square one. 

In part three, we will be looking at the role of Sales and how a Salesperson’s behaviour and attitude needs to change in order to make the new culture work. We will also be painting a picture of how your company will look if you succeed in making this change.

Catch up on our series: 'How to establish a team relationship between Sales & Operations'
Part one: Understanding the issues between Sales and Operations
Part two: Creating a new culture and the role Operations play
Part three: How Sales can help and gain competitive advantage
Part four:  The Benefits of a close relationship

Pinnacle Consulting specialise in construction sales recruitment attracting the best building products sales jobs from some of the best manufacturers and distributors of building materials throughout the UK. Call us on 01480 405225 to discuss either your next career move or if you are looking at bringing high quality salespeople to your company who can understand the needs of the whole company.

Martyn has worked in managerial and directorship positions for market-leading companies including: manufacturers of sprinkler bulbs used in fire protection systems; catering fit-out equipment for hotels, restaurants and commercial kitchens; commercial ventilation extraction units; and domestic plastic piping systems and accessories. Martyn currently works for Day-Impex 

1 comment:

  1. Without reading the whole story the first thing that came to my mind was remember to educate the CUSTOMER with your requirements, to be able to satisfy their needs.
    I spoke at a National Conference of the HIA, as a young Brick Manufacturing Executive, and with a slide presentation went through all aspects of what we did.
    So many of the complaints voiced where re colour matching. When it was explained that we were running Bricks through Kilns and if they had an order that they couldn't handle on site in one delivery, order the full requirement and we would hold the product for them and ensure that the colour was consistent.
    I also as GM promoted social contact with our Customers at Sporting Events etc to allow the opportunity to have an interchange of ideas. I went out with Representatives occasionally to hear what we were saying and promising to our CUSTOMERS.
    So I accept what you are saying re internal measures but don't forget CUSTOMER EDUCATION.