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Sales Performance Measurement in a manufacturing industry

I have recently been charged with creating an excel schedule for the purpose of measuring sales performance. I am feeling intimidated by the task as the majority of staff have much more advanced education than I hold. In my past life I measured performance in a retail industry and it doesn't relate to manufacturing. Currently I include Revenue, Cost, and expenses. Can anyone offer some suggestions on how or what to include in a report to be given to the CFO and Executive VP of sales? I am also new to the use of Salesforce and quickbooks as the industry I came from used industry specific software .


Topic Expert
Vernon Reizman
Title: CFO
Company: RCM Industries, Inc.
(CFO, RCM Industries, Inc.) |

You are starting off with a rather expansive target. I will provide some thoughts to get things rolling but you need to narrow down your scope. Start with the sales pipeline, what drives orders? Perhaps track # calls made, quotes issued. Once you have an order how about on time shipments vs. late? Backlog? Shipments to plan? track quality--# and $ value of returns, customer complaints, scrap etc. Is downtime an issue in your process? If this causes sales issues track OEE or other metrics. we track value added. If machines are running well we know what we expect per shift and daily in sales value to be produced. If labor is an issue track headcount or labor dollars. After the sale monitor collections/dso just like you would with your retail background. But don't just gather numbers. Figure out what drives success by talking to your mfg., sales and finance people. They should be able to tell you what they believe is key to happy customers and ultimately profits.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Building on Vernon's wise counsel, may I suggest:

1. start with a plant walk through. Follow an order from creation (in sales) to delivery and understand the business processes that have to be executed to fulfill the order. Try to identify what your colleagues see as pains today, as well as what they think is key to delivering an order on time, in full, no errors.
2. are you a "make to stock" or "make to order" plant? This may drive how/what you measure regarding order lead time, on time delivery%, number of rush orders + reasons
3. combine financial and operational data-e.g. number of sales orders, average order size (units and $), number of times an order is changed before delivery
4. get someone to test and challenge your workings, assumptions and analyses before your present them

Jim Burtt
Title: Director Global Financial Systems & Proc..
Company: formerly at Guidewire Software, Inc.
(Director Global Financial Systems & Processes, formerly at Guidewire Software, Inc.) |

I heartily agree with Vernon that SPM is an expansive target. If you can get your hands on a copy of Gartner's Magic Quadrant for Sales Performance Management, it will help you understand its breadth and some of the leaders who offer automation tools. As Vernon and Len advocate, understanding your own company's KPIs is crucial to success. So is identifying the underlying processes and availability of the data sources. Is there any low-hanging fruit you can pick to get the project started?

Kevin Gray
Title: Director, Product Marketing - Anaplan fo..
Company: Anaplan
(Director, Product Marketing - Anaplan for Sales , Anaplan ) |

As Jim suggested, read the Gartners Magic Quadrant for SPM - the latest release in January 2015. We (Anaplan) are seeing more and more organizations adopting SPM in both sales and operations; and specifically in manufacturing. I like the advise that Len has provided -- "start with a plant walk through and follow an order from creation (in sales) to delivery and understand the business process." Far too often, organizations try to map out the process without "walking through the process". My wife works at a pharmaceutical facility and she has visited the corporate office and met with the sales, finance, and operations teams there to gain a better understanding of how a sales order from a hospital flows through the system and has then visited the plant that manufactures the actual product to gain a better understanding of how the product is produced and the time it takes to get into the customers hands. It's interesting how this exercise has produced actionable insight from improvements in the sales cycle to improvements on the plant floor. One thing to consider is the "Sales Forecasting" process. Improving your sales forecasting process can improve so may other sales processes including how the organization defines their sales coverage model or territories, how they assign sales quotas, and how the design and rollout their incentive compensation plans. An accurate sales forecast can have positive impact on all of these SPM business processes. Also, with an accurate sales process, the manufacturing of the product improves because the plant facilities have improved metrics on what they need to produce and how much they need to produce without any waste or backlog. If you are looking for a technology solution to improve your sales performance management - make sure that you consider one that offers "Sales Forecasting" and that it can be connected to all your other sales and operations processes. Sales, Finance, and Operations need visibility across the organization. Hope this helps a little.

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