Exceptional Results in Revenue Growth

THE CHALLENGE

Determined to improve the effectiveness of their sales force and minimize order fulfillment costs, this health product distributor requested Carpedia to conduct an analysis to identify opportunities for improvements.  Initial analysis showed opportunity in 3 areas:

• The two sales force channels spent between 16% and 35% of their time in direct contact with customers.  This was primarily due to excessive administrative activities and several non value-added activities
• The warehouse operation was shown to have 50% non value-added time in their processes as a result of unnecessary process steps, excess travel time and idle time
• Outbound freight showed opportunity to generate 5% savings attributed to the selection of non-optimal carrier selection

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THE RESULTS

Working closely with client staff, the Carpedia team was able to deliver a 2.7 to 1 ROI, beating the required result of a 2.4 to 1 ROI.  The collective efforts of both the team and internal client resources was acknowledged by the President when in saying

“…you worked with our people, helped bring them on board so that they have become very enthusiastic on finding improvements continually.  You don’t just come and write a report and then leave, you come in, help identify where improvements can be made, then work with us to implement… Our people now understand the Carpedia process and continue it.”

The main operational drivers supporting these financial results included:

• 7% increase in sales from the outside sales channel
• 23% increase in sales from the inside sales channel
• 25% increase in outbound calling by each channel
• 32% improvement in Warehouse productivity
• 8% reduction in outbound freight costs

The following changes were instrumental in achieving these operational improvements:

Inside / Outside Sales

• Reducing administrative activities within business hours
• Pre-presenting store visits to Managers to reduce non value-added waiting time and generate additional brand recall
• Transferring administrative activities to Customer Service Reps to create additional call capacity
• Execution of skills training with reps to standardize the sales call approach

Warehouse

• Eliminating non value-added steps in the packing process
• Revision of the layout of the packing area to reduce travel time
• Utilization of carts in the picking process to reduce travel time
• Increasing advanced replenishment to decrease idle non value-added idle time spent waiting for product to be stocked

Freight

• Implementation of a freight matrix to identify low-cost carriers by volume requirement without sacrificing transit times