OPPORTUNITY OR PROBLEM
Product sales for a major manufacturer of small/home office business products began declining in a targeted market at a rate of over 4% per year, despite the divisions’ attempts to introduce new products and enhance existing products to generate business growth. This was resulting in millions of dollars in
lost potential revenues.
APPROACH TAKEN
A Lean Six Sigma improvement team was commissioned to look at the management process, map out the existing process and recommend changes. They quickly identified factors that possibly impacted the decline in sales/revenue. Using a combination of management interviews, graphical tools and data collection, the team determined that various changes to the management process should be implemented. The key changes that were made included:
– Creation of a dedicated staff to service this declining market.
– Changes in product development to be more tailored required product deployments to sales and operations personnel.
– Instituted a Management Team incentive program focused on product growth specific to this market.
– Strengthened the measurement and management system to make them more proactive to sales throughput and customer focused.
As well as these various process changes, this improvement initiative also resulted in improved
communication, education and awareness of this management team and they were able to improve key
products and the associated processes for their most important sales channel.
OUTCOME
As a result of this improvement project, the uncorrected revenue trend was projected to deteriorate even further, producing additional years of declining sales, resulting in millions of dollars in lost contribution margin. The downward trend was reversed, allowing this successful fortune 500 company to avoid the loss, and achieve a significant year-over-year increase in sales.
* Due to nondisclosure agreements, the organization referenced in this example cannot be disclosed.
