Internal
Structure: assessment
of convoluted decision-making process,
firefighting and operational inefficiency:
Recommended
move from flat organisational structure to one
based on clarity and efficiency
Reduction
of direct reports to the MD, with more effective
delegation and instigation of precise job
descriptions, creating clarity and specific
accountability for key activity areas
Recommended
recruitment of two senior roles, based on
evaluation of incumbents
IT:
conclusion
that new IT and management information system
was not needed, and that better usage of
existing IT resource could create significant
further operational efficiency
Management
Information: discovery
that there were substantial gaps in the
essential MI on which the business should be
basing its operational decisions:
Created
an inexpensive Access database, drawing account
and customer information from the existing,
unsatisfactory marketing databases and the Sage
accounting system
Conducted
costing analysis to identify the profitability
of the product set, and allow the business to
focus on their most profitable, and most
unprofitable, products
Allocation
of servicing and operational costs against
individual customers, to provide robust ‘gross
profit’ (revenue less all attributable costs
to serve).This identified
the profit (or loss) generated by the customer
base, and allowed these customers to be ranked
by profitability, not billings.
It
identified that 80% of revenue and 50% of profit
derived from 3% of customers.
Set
up a marketing database to allow the ongoing
measurement of the effectiveness of catalogue
and promotional activity
Procurement:
using
the new MI, reduced the volume of SKUs by 25%,
and introduced a two-tier procurement system
whereby longer stock-turn items were warehoused
in smaller quantities, with higher warehouse
quantities of volatile or high-margin stock
Customer
Service: recommended
prioritisation of customer care, whereby
high-profit customers received top service
levels, and also became the focus of outbound
sales and courtesy calls.(Previously all customers had received
identical “100% service levels” treatment)
Customer
Contact: recommendations
for alteration to order-taking team’s phone
procedures:
Capturing
missing customer data, along with customer
preferences and future needs
Passing
this data to the marketing team for usage in
more focused marketing material
