Tianjin Wheat Trading Co., Ltd. (X&M) was established in November 2012. Its main business is commercial distribution, mainly the wholesale sales of daily commodities.
Before 2012, the founder (general manager and sales director) of the company had been engaged in foreign trade business. Since the financial crisis in 2008, import and export trade has become more and more difficult to do. Especially in 2012, the total import and export trade of the country was only Single-digit growth, full of fatigue.
Under the background of the country's advocacy of "expanding domestic demand", the founder turned his attention to the domestic demographic dividend. In 2012, the estimated birth population will exceed 16 million. In 2011, the urbanization rate will exceed 50% for the first time. So he set up "Wheat Trading" in his hometown Tianjin. With the help of the resources accumulated in the early stage and the localized sales team, he achieved good results in the second year of establishment and gained a firm foothold in one fell swoop!
problem pops up
Through the chief manager's mobile phone report, all the data in 2013 delighted the team. Regardless of the momentum at the beginning of the year, the trend of the year, or the completion rate of the goal, everything was impeccable. In this case, the sales team set a benchmark for 2014 sales growth rate of 70%, which was another extremely challenging task, but no one raised any objections under the "experience" of a perfect start in 2013.
Because of the smooth sailing in 2013, the company set a growth rate target of 70% at the beginning of 2014, which was perfectly achieved in the first quarter. However, since the second quarter of 2014, the company began to fail to achieve its sales plan. It dropped directly from 92% in April to 29% in May. The impact also spread to June (56%), which is understandable. However, the sales completion rate in the entire third quarter was less than 35%. Coupled with the continuous backlog of inventory, the survival of the company suddenly became a serious problem. The management team had to meet during the National Day to discuss problems and discuss countermeasures!
A Meeting That Smells of Gunpowder
After taking his seat, the general manager first pointed the finger at the sales director, "The focus of today's meeting is sales, so let's talk about it first!" The general manager seemed to be holding back his anger. The sales director seems to have been prepared for a long time, throwing out his own analysis point of view:
- The outbreak of the epidemic in May is an objective situation, and I will not emphasize this reason!
- Let me ask you a question first. Everyone knows about Double 11. Last year’s one-day sales was 35 billion, an increase of 85% compared to 2012. Our traditional sales methods have begun to lag behind. Gradually changed to online shopping. At the beginning of the year, I mentioned the development of an e-commerce website, is it starting now? !
- Another problem is that the cost price of the purchased goods is too high, and the finance department requires at least 10% gross profit. The result is that the sales price is too high, and it cannot compete with some emerging brands! !
- In the end, supplier management has a lot of flaws. Last year, rice, which ranked No. 4 in single product contribution, had quality problems, and customers returned the goods in large numbers. For suppliers with no quality problems, the finance department defaulted on the payment for the goods, and the sales work is still going on normally! !
Hearing the last question, the chief financial officer couldn't hold back, and before the general manager asked, he took the initiative to say:
- The most obvious problem is that the sales payment is too slow, and the billing period is now 2 months, and the current accounts receivable are almost 300,000 (US dollars). This leads to a tight cash flow. It’s not that I don’t want to pay the suppliers in time. If I can’t pay the wages after paying, the company will fail!
- In addition, in the fourth quarter of last year, I implemented budget management. The data can be seen all the time, including salespersons, individual products, and months. But is anyone paying attention this year? Everyone's focus is still on the specific issues of process, efficiency and quality!
- There is also a problem with the management of the sales team. Last year's bonus distribution plan was very unreasonable, which dampened the enthusiasm of last year's sales champion, Lin Guorui; that Liu Bohong's performance last year and this year was the lowest, and I don't know who is keeping it!
...... Like most similar situations, the leaders of various departments have a lot of words, and they pour out their brains. It seems that the more they talk, the pressure of poor sales performance will be relieved. The more the general manager listened, the more annoyed he became. How could the problem be solved, so he said loudly:
Rational Data Analysis
Under the guidance of the chief data officer, everyone began to sort out their own data analysis ideas. After half an hour, the sales director handed in the homework first:
- Since we have always had a sales plan, and we can specify the salesperson, month and product, we will first do "target performance analysis" to see if the target is reasonable or not, and then compare the performance of different salespersons and products. We should be able to see out of question. After the epidemic in May, it must have been a major management error if the sales target was not lowered!
- In addition, the structure, trend and comparative analysis of salespersons, products and regional markets (customers) according to the "people and goods market" will surely find more specific reasons. If the salesperson has a problem, I will adjust it immediately, and I will never tolerate it!
Reasonableness of the goal?
According to the first idea, the sales director quickly positioned several problems:
1. Why in 2014, the sales target growth rate of the beverage category is much higher than that of other categories, while the growth rate of cereals/oatmeal is only 6%?
2. Why did Xia Meili not set a sales growth target for 2014? It was a slip through the net!
Following this line of thought, more details were found on the rationality of target setting. For example, Jiang Yiyun’s sales growth rate exceeded 10 times in February, and Xia Meili’s best-selling beverage was -3%... ... These questions reminded the sales director of the second question mentioned by the financial director. These goals were determined during the comprehensive budget management in the fourth quarter of 2013. At that time, they did not pay attention to it. They just asked the salesman to report the Excel data to the financial director. Now it is I'm afraid it's hard to tell which link is the problem. The sales target for 2015 can no longer be like this. There must be a process to support it!
"People" sales analysis
Because today is the National Day, the data of the first 9 months of 2014 is complete, and the sales director begins to conduct a comparative analysis of each sales.
As the chief financial officer said, Lin Guorui was the sales manager in 2013, but why did he completely misfire this year? Could it really be because of the bonus! When Lin Guorui applied for a salary increase and declared a bonus, the sales director only agreed to his application for a salary increase because of the consideration of the total cost, but cut his bonus by 50% as a negotiation condition...
"Goods" sales analysis
Then I checked the performance of the category. Cereal/Oatmeal made the smallest contribution to revenue last year. This year, there has been a double drop in sales and amount. At the same time, I also saw good news. The biggest contribution to sales is beverages, and the overall growth rate has indeed reached . 70%.
"Field" sales analysis
Finally, when he saw the sales situation in the region, the sales director was a little confused and didn't see any problems for a while. After a closer look, he found that the growth rate of accounts receivable in South China and Southwest China was much higher than the sales amount.
Analysis of financial indicators
Seeing that the sales director found more and more specific problems from the data, the financial director also began to look for problems through reports:
Although the general manager is very concerned about the financial data, the decision-making financial data is the result, not the cause. The most fundamental solution is to improve the front-end sales of the business. Fortunately, the sales director and I have reached a consensus on the approval of the sales target in 2015, otherwise I will feel a little lost.
CDO is the ultimate winner
Seeing that the gunpowder-smelling meeting turned into a rational analysis discussion meeting, the general manager was very pleased with the work of the chief data officer. He withstood the huge pressure on the setting of this position, and today it finally played a role. In the link of analyzing data just now (Perspective analysis data set), report link (spreadsheet report), and the soon-to-be-started reporting and approval seem to be solved by the BI tool Smartbi spreadsheet software. The key problem is that the annual cost is less than 20,000. It is only equivalent to 1 month salary of CDO.
After the top ten problems were listed through data analysis, everyone was relieved, and the dinner party in the evening returned to the unity and friendship of the past. It seems that future problems will definitely be solved! X&M, come on!