Have an SeniorERP account? Login
Implementare ERP, CRM, BI, SFA si SCM pentru distributie, productie, servicii si retail

ERP system and the sale process in import and distribution companies

In a company, almost any activity has the aim to optimize the final sale. But it’s hard to define the boundaries of this process in a company. Results of operations executed by different departments other than the sales one, such as enhancing the impact of marketing actions, streamlining the purchasing, logistics fleet modernization, upgrade IT infrastructure, increase the quality of HR processes, etc., at the end are seen in the increase in positive indicators that qualitatively and quantitatively define the sale process.

For the above statement there are also counter-examples, generally related to the improvement of cost versus revenue, in which the voluntary waiver by a segment of the income produced, is a successful economy in the expenditure at least equal to the loss. Starting from the idea that to improve consistent and sustainable performance related to sale, a company needs to adjust all collateral proceedings, we detail some aspects of the specific activities of the department for sale.

Budget vs expenditure. Sales Target
Planning your company’s financial results has two components: the achievement of forecasted expenditure budgets and the establishment’s target sales. If the sales department creates an income at least equal to the target, while the remaining departments will not exceed budgeted expenditures, the results are positive. If instead, there are deviations in the directions of unwanted parts, it will usually be compensated in the other side. Any unfulfilled income compensates by reducing budgets allocated to expenditures, any overrun of costs has to meet an additional income. Without these measures, financial results will be below the forecast parameters.

To avoid the negative shocks in the organization, planning of targets for selling produce a substance by analyzing historical data, the influence of external actions related departments (marketing, logistics, IT, financial, etc.), the appearance / disappearance of products / customers in / from the portfolio, the change in sales force structure, the incorporation of new sales channels, etc..

Tools for analyzing complex data
For the analysis of complex historical data, when data volumes relatively small, and low-cost analysis, you can use tools Pivot Table type applied directly to existing data or grouped in local cubes. One such widely used instrument is Microsoft Office Excel, version 2007 is very focused on this type of analysis, including on offering options to estimate the trend and make predictions, virtually unlimited possibilities of grouping, sorting and presentation of data analysis. For simplicity it is recommended a good integration with systems that expose the data for analysis.

If there are large volumes of data, you have to appeal to specialized tools of BI. These tools are usually integrated with the ERP or CRM type to facilitate access to existing data. Using techniques of Data Mining, historical data into information is vital to managerial level. With the help of these tools you can build and pursue strategic indicators (Key Performance Indicators). One such product is Microsoft Office PerformancePoint Server 2007,which, along with SQL Server 2005 and Microsoft Office SharePoint Server provides a complete BI platform. As the last indication, quality of analysis depends directly both on the quality and quantity of existing data and expertise of analysts.

Segmentation strategy on equity
In changes appear in the sales force, they may able to influence positively the quality of the sale. For example, if a large portfolio of products is impossible balanced distribution of the effort to sell products, those products are favored by the easy sale, with advantages such as competitive price position in the specific market segment. In this case, to choose the segmentation of the sales force divisions, each division being allocated in balanced portfolio of products. In this way targets sales can still be watched.

Sales Force Automation (SFA – Sales Force Automation)
Sales force automation can provide added control and management information flow. Implement such a system can have spectacular results, especially on the qualitative aspects of the sale. Sensitive points in the acquisition of such a system consist of compatibility with existing systems and quality of hardware. There are cases where after 3 months after the acquisition it was necessary to replace the entire fleet hardware for SFA.

Automatic calculation of sales agents commissions
A serious mistake, still common in policies granting of bonuses / commissions is the lack of transparency of its calculation. Money manager compensate for a “algorithm” known only to him, or partially shared team. The effect is a state of uncertainty / insecurity in the team, and if this state evolves to dissatisfaction, the final effect may be lack of motivation or even mass migration team.

Another mistake is to grant bonuses in addition depending on the prevailing sales. If the sales agent who wants to justify the bonus received in the case manager is to disclose sensitive information related to the purchase prices and margins charged. Correctly is to take account of discounts granted to list prices, providing managers with trade policies set in the ERP that can not exceed certain maximum thresholds, so that margins are charged less than the discount possible to stay in the parameters of wanted profitability.

Because the manner of a salesman is a very important lever that can control the quality and volume of the sales activity, there is a tendency to incorporate in the algorithm for calculating many parameters. This has adverse effects, sales agent, being aware that anyway you can not look at all factors simultaneously influence, focusing on what he thinks he can make easier, or loses direction trying to cover as many variants as possible.

An effective solution must be fully transparent to the operator not to have a degree of complexity too high and cover several key elements of sales volume (less important, is taken by the incomes, to collect, you must sell in advance) and distribution of sales (on various product categories and distribution channels), the incomes and time of payment (commissionaire here should work both ways, bonus compliance parameters, and penalties to overcome), the quality of sales (discounts granted influence inversely proportional bonus awarded exceeding maximum discount can be penalized, except where agreed in advance).

A detailed report to justify the bonuses should be available for the agent to always check the accuracy of the amounts received.

Peculiarities of distribution channels

1. Selling by key accounts
It works only on a segment of the total portfolio of products.
Various fees are charged, such as listing fees, re-listed, promotional etc.. These fees may be redirected, partly or wholly, by manufacturers, so sometimes there is a need for detailed tracking of them – see Controlling module.
Are very strict regarding honoring orders. Keeping is followed by successive application of penalties and de-listing.
Often products are listed under other codes, names and packaging units than the internal ones.
It delivers products that must meet certain parameters of the BBD, quality, packaging, etc. are.
Are delivered through notices and invoices are issued cumulative.
Are required for joint operations / decomposition goods to be delivered according to orders received.
Due to the large volume of activity and periods of relatively high paying, cash flow negatively affect the supplier. It can be used as an alternative to financial operations of Factoring.
Requires permanent merchandising.
Require precise estimate of the selling price because of change of operation is cumbersome and duration.

2. Selling through distributors
Shall constitute an effective alternative to the opening points of territorial.
Require attention when working on the same area with multiple distributors.
Require a coherent pricing policy to avoid potential conflicts.
Require careful monitoring of the existing dealer stock to avoid stock ruptures or overload stuff.
You carefully to avoid dependence on a number of arrears distributors .
Requires attention to building sales targets depending on the specific conditions of each distributor.
Quality monitoring is required for sale to the distributor. Usually a dealer sells more products and suppliers give attention only to products that benefit him.
Orders can be centralized by the distributors at a Business to Business portal.
Logistics can be outsourced

3. Direct Selling
Require a system capable of managing a portfolio of tens of thousands of customers, pricing policies, discounts links, terms of payment and promotions for a large number of points, the trading agents, fleet management, deposits, etc..
Provides complete control over the sale
Has the highest cost
Require a strong infrastructure in all selling aspects for a company with such a specific time to evolve a logistics platform in the efficiency of existing infrastructure

4. Sale by retail
Management is generally held to the shelf price
Usually this channel is combined with selling wholesale for vertical integration of sale process
Ensure a secure cash flow
Allows implementation of programs for customer retention

5. Selling online
Represent the most expensive sales channel
He has very wide area coverage
Enroll in market trends
Requires account through promotion instruments
Require integration with existing systems
It is extremely attractive in terms of which are found in lower quality and quantity of labor available
Distributed processes and Internet sales
Regarding the sale process viewed as distributed at the national level or higher, there is a tendency to store data centrally, access to information is real time, using the communication channel and the Internet. This option is recommended because of the obvious benefits of working with last-minute information, and communication costs are affordable and continue to decrease.