Comparing Manufacturing and Sales Processes
At break, Bill approached Ray, the sales manager from the Pigments Plus Company, a key pigment supplier to Rapid Products. Bill reached out his hand to shake and said “Ray?”
“Yes, I’m Ray, and you are?” replied Ray.
“I’m Bill Kecat. I manage the sales group here at Rapid Products. I’ve wanted to catch up to you; Sam indicates that you’ve been on the Lean Sigma for sales journey for a while, and that I might be able to learn some things from you. Do you have a minute for me to pick your brain?” responded Bill.
“Sure, until the session starts again,” said Ray.
“Well, first off, how long have you been doing this Lean Sigma thing?” asked Bill.
Ray smiled and said, “Great question; we’ve been doing Sales process improvement ever since Sam required it about three years ago. At the supplier conference three years ago, Sam made it a requirement for us to align with Rapid Products regarding your Lean Sigma improvement efforts. That meant that we had to provide proposals and quotations that included cost reductions, and the best way to do that was to embrace the Lean Sigma improvement methods. At the sessions, Sam provided additional training, much like they are doing this year,” professed Ray. Ray continued, “We not only used the improvement tools to in manufacturing to develop cost reductions over the life of the contract, we decided to incorporate the methods and tools into our sales processes as well.”
“Yeah, we use the methods and tools in manufacturing, and have been quite successful, but I’m not sure it applies to sales,” indicated Bill.
“Oh absolutely it applies to sales! Perhaps even more so; it is a bit different than in manufacturing, but the methods and tools helped us to eliminate wastes and grow sales faster that we would have been able to do without them,” exclaimed Ray.
“I see Rapid Products use the Lean Sigma methods and tools in our manufacturing areas. In our manufacturing areas, we have cycle times, scrap, inventory and we’ve been reducing them for a while, but how does it apply in sales areas?” asked Bill.
“Well remember the 12 wastes? These wastes exist in sales as well, they just look different than they do in manufacturing,” said Ray.
“Yeah, I do see that, even in this phone order rapid improvement event I’ve seen several forms of waste are present and being reduced or eliminated,” replied Bill.
“Well when we mapped our sales processes, we found we had almost every type of waste. We overproduced several reports on a weekly basis that no one read or used, we had people assigned to the wrong areas wasting their expertise, and we were spending way too much time driving to sales calls, when most of our customers didn’t really need to see us, but in reality, they were paying indirectly for our visits. We also had a fairly high error or correction rate on our proposals, and we eventually completely modified our sales organization structure based on what we discovered with Lean Sigma methods. At next break I can share more with you. We should get back to the session now,” said Ray.
At the next break Bill and Ray reconnected, and Ray explained his perspective on sales processes. “You see sales processes are not really that different than manufacturing processes. Yeah, manufacturing processes generally have a product, but don’t we supply a product as well? Isn’t a proposal or quotation a product? We have to conform to standards and specifications, and deadlines as well. Sales processes have inputs, and suppliers, starting points, process steps, and end points, as well as outputs and customers. The inputs for a manufacturing process may be materials and specifications, while inputs for a sales process are typically information and possibly some forms. Manufacturing processes have these items as well. You see sales processes are simply service processes. We use what we call a ‘counselor selling’ approach, where we try to provide client counseling on problem solving whether it involves our products or services or not. We believe that if we act in the best interest of the client we will be seen by them as problem solvers, not just suppliers. Being a counselor seller is like providing a problem solving service. When we were just starting Lean Sigma in sales we went to a Lean Sigma for Service seminar and learned about the following areas of service.”
“It’s not always about speed and efficiency for a service organization,” continued Ray. “Sometimes service customers detailed proposals; sometimes they just want rough numbers. All requests for quotes are not the same. Ray continued, “For example, we used to treat every request for quote the same no matter what we were being asked for. Our quote process took only 24 hours to complete based on the data we were given by the customer, but we found sometimes this process was too long, so we developed a quick quote process with standards and the like.”
Bill smiled a knowing smile and said, “We do that too, but we are never really sure why, and lately our quick quote process has been used more and more regardless of what was requested by the customer. It seems the sales person drives the process.”
“I can see where this might cause some problems for you,” replied Ray.
“How do you know what your customers want?” asked Ray.
“What do you mean?” asked Bill, seeming a bit confused by the question. “They send a request for quote.”
“Well, how do you know if the customer wants a quick quote or a fully detailed quote?” clarified Ray.
“Well, we assume the sales person knows. We develop relationships and trust our gut on what is needed. Sometimes, if we have a good relationship, we may call and ask specifically what they want. Otherwise, we just get the proposal or quote turned around as fast as possible, as sometimes the first quote back gets the order,” said Bill.
“That seems a bit risky to me,” replied Ray. “Sales quality differs from product quality in that sales specifications and requirements are not always as clearly defined or articulated by the customer or buyer. In fact, it is quite common for customers of the same sales organization, to have completely different expectations and requirements. You claim that the relationship dictates the process, but that can cause variation based on the relationships, and Lean Sigma methods work to reduce variation and errors. Sales organizations must, therefore, discover and define their own service quality parameters, measures, and specifications based on specific customer needs, and then design systems to accommodate all potential customers, in effort to achieve a high level of customer satisfaction. Sales organizations need to consider rapid identification and customization or adaptation to the client’s desires,” Ray continued.
“Quality in general is often confused with product or service features. For example, a person may consider a Hilton hotel to be a higher quality than a Motel 6. These two lodging providers each provide similar base services, yet the Hilton may offer additional features along with overnight accommodations. They each have specifications and requirements designed for different target markets or customers. They each can provide quality facilities and services to meet their client’s needs,” added Ray.
Ray continued, “Features such as swimming pools, fitness rooms, dining rooms, office services, etcetera, are considered additional features, not improved quality. A guest wanting only an inexpensive, clean, and safe place to sleep for the night may be perfectly satisfied, and even delighted, with a high quality room at a Motel 6. Each provider may have equally high quality in the services and features they provide.”
“Sales deliverables themselves can be complex and subjective with many stakeholders. Sales deliverables can be characterized by the following general parameters,” said Ray as he picked up a marker and wrote the following on the white board.
Sales Deliverables
Sales and Service Deliverables Parameters
• Integrity and trust worthiness: Making and honoring commitments, deadlines and expectations.
• Timeliness: Delivery of service or information in a reasonable time frame.
• Courtesy: Being respectful and courteous in service or information delivery.
• Consistency: Having similar and consistent results met each service or sales transaction.
• Predictability: Meeting normal expectations in a predictable fashion.
• Accessibility: Being accessible to the client when they need to meet or communicate.
• Completeness: Resolving issues and providing services as agreed upon.
• Clarity: Providing clear and unambiguous service, instruction or information. Defining expectations and outcomes clearly.
• Value: Providing a fair and reasonable service deliverable for the fees incurred.
• Hassle, annoyance or waste-free transmission: Providing sales processes and services that do not frustrate the consumer or client.
• Accuracy: Providing accurate information and results or outcomes.
• Cleanliness: Providing clean facilities or equipment for client use and interaction.
• Enjoyment or satisfaction realized: How a service or transaction makes a person feel.
“In identifying and defining client specifications, and requirements, sales organizations should consider these parameters, and make sure that they are appropriately satisfied,” concluded Ray.
“Yea, I get all that, and that’s why we focus on relationships,” added Bill. He continued, “Some sales process deliverables or outcomes are more objective or measureable than others. For example, a sales representative can deliver a quotation quickly, but if it is inaccurate or has to be modified several times, this can frustrate a potential customer, and I think this may be the source of some of our problems.”
Bill grabbed the pen from Ray and sketched the following diagram on the whiteboard. Bill explained the diagram by saying, “This diagram plots the ability to objectively measure the service outcome, against the type or focus of the service provided.”
Service Outcomes and Focus
Source: Ptacek and Motwani.
Bill continued, “Many sales service transactions shift fluidly during the delivery process. An example might be a communication between a customer and a bank teller while processing a deposit. The deposit being entered accurately is clearly measurable, yet the ‘feeling’ that the customer has during the process may not be as easily measured. In fact, one customer may desire a friendly and talkative experience, and to learn about the new savings program, while the next customer does not value any chit-chat. The teller may behave the same for each of these customers, and will get good reviews from one, and poor reviews from the other. Here lies one of the keys to developing sales service excellence—understanding the customer’s need, and we use our relationship building to do this.”
“There are a lot of opportunities for Lean Sigma methods and tools in a sales organization. I think you should start a couple of improvement projects,” commented Ray.
“Great! How do I do that? Where do I start? Where did you start?” asked Bill.
“First, you need to build a foundation to support Lean Sigma improvements in sales, so you have plenty of time. The first step starts with you,” Ray said.
“Me? Why me?” replied Bill.
“The session is about to start, we’d better get back to our seats,” Ray said.
During the next session, Bill did not hear a word of the presentation. He was too busy running Ray’s comments through his head. How could it all start with me, when I have no idea where to start? Bill wondered. He would not get that chance to ask Ray any follow up questions either, as the sessions were coming to a close, and Ray had to run immediately after the session. Bill wondered where to start. He thought he’d better catch up with Sam the following week.
Discussion Questions
1. Evaluate Bill and Ray’s conversation. Do you think Ray was able to convince Bill about the application of Lean in the sales process?
2. Do you agree with Ray’s comments that, “You see that sales processes are not really that different from manufacturing processes?” Why or why not? Explain.
3. Evaluate the sales and service delivery parameters identified by Ray? Which of these does you or your organization use?
4. Critically evaluate the services outcome and focus diagram. Where would your organization fit on this diagram?