Friday, January 19, 2018

Sales: Art or Science, or...?

All of us that are responsible for growing sales whether the CEO, Director of Sales, VP of Sales etc., wrestle with the age old challenge of figuring out how to inspire greater performance by creating systems, incentive plans, accountabilities, KPIs, support, environments and ongoing training among other components to sales management success. Sounds like a lot of complexity doesn't it? Ultimately it is because there are so many different pieces that can affect sales success that it feel as complex as can possibly imagined (as we all know).
The ongoing raging debate that is endlessly posted on LinkedIn and online and the board rooms and meeting rooms round the country and world, centers around whether sales is an art or a science, whether one is born with 'it' or it is 'learned' (gotta' love the old nature versus nurture argument: my answer is it is really both, with the huge impact common denominator being desire/drive, which is inextricably intertwined in both sides of that argument in my view).
Bifurcating Sales success between 'art' and 'science' tends to does a disservice to what I feel is the central question concerning how to impact sales success: Which is ultimately how effective the individual sales effort is. Effectiveness accounts for how two sales reps can literally follow the exact same sales script, yet one is a consistent top ten percentile performer while the other one is a bottom percentile performer. The refinement and creation of KPIs as well as other activity data is to distill sales effectiveness down to its granular activity components in order to create a formula that is hopefully duplicable, repeatable, and teachable, for sales success.
While the work to get to meaningful KPIs and leading indicators makes sense on the surface, the assumptions of what the KPIs mean in relation to effectiveness is where the rub usually is. 
Ultimately the KPIs and CRM measures are only components which management leaders hope will lead to the sales 'answer'. Because this approach doesn’t usually actually measure 'effectiveness', it can lead to misfires and managing to the wrong drivers. 
So what is the answer you may ask? I wish I had invented it but I have to say that the book by Stephen Covey, "The speed of Trust" really hits the answer on all cylinders as it relates to what the underpinnings of what sales effectiveness means and how to get there. The book talks in no uncertain terms about the fact that sales is really the transfer of trust. I have found this to be absolutely true. When you find a vendor that is high integrity, is straight with you, delivers good news with as much vigor and speed as bad news, is consultative, listens and comprehends your challenges, then proposes customized responses based on your answers, you tend to trust them and the business relationship is born...
Sales wonks often talk about the million different ways to 'close deals'... but the reality is one must know how to Open Relationships. 'closing deals' are a byproduct of good relationships, while conversely you cannot close a deal without there being a relationship typically... a transfer of trust!
So, at the end of the conversation about what KPIs we should be measuring, I would posit that feathered into the measurement and tracking of activity KPIs like how many calls were made, how many Requests for Quote were received, etc., etc. etc., there also needs to be a strong system that measures sales effectiveness. Sales effectiveness can be inferred with ratios like book to bill, quote to book, average deal size, average profit margin etc. By measuring those areas which can be actually completely automated (IE: eliminating what all salespeople hate which is filling out reams of data and taking away from their sales time), owners and managers can start to focus in on sales effectiveness.
At least that is my take on how to grow numbers and sales and measure for those things that are important so we can help our salespeople actually spend time honing their selling skills with data that will lead them to sell more.... effectively!

Tuesday, November 1, 2011

THAILAND DISASTER IMPACTS SUPPLY CHAIN

Dear Readers,

Hot on the heels of the Japan Disaster which is still impacting the supply chain in many areas, we now have a major disaster in Thailand.  The immediate and intermediate impact is limited to a few brands but those brands are definitely on our watch list of potential problem parts in the supply chain.

The list is as follows:
-          TEXAS: Expect impact from Texas from Thailand flooding. Some DC convertors lines (TPSxx and DCP01B) ; some logics lines (SN74LVxx; SN74AH)
-          ON SEMI: (ex –Sanyo sites/products mainly)  transistors (2SCxxx; 2SAxx; FWxx ; SFTxx; SOPxx) ; diodes (SBTxx; SVCxx) ;  linear (LAxx); Tantalum Cap (TBP series) , mosfet  (ECHxxx)
-          ROHM: productions sites have shut down, the first one the 8th of October the second site the 18th of October. IC’s , transistors, diodes, resistors, caps are affected but ROHM doesn't give the exact list. We have seen a lot of requirements on the resistors (MCR0x serie), sensors (BH16xx); power management Unit (BAxxx; BDxxx).
-          NEC: Tonkin  : tantalum caps  - PS/L serie (TEPSLxx/TLPSLxx) ; super caps (Electric double layer caps) series FA0, FA1, FC0, FCH, FCS, FE0, FEW, FG0, FGR, FM0, FMC, FMR, FR0, FRW, FS0, FS1, FT0, FYD, and FYH are quite short. From 1 customer we have heard that delivery could be extended to Q2 2012; the Proadlizer caps ( PF/A Series) are also affected
-          FAIRCHILD: especially the tinylogic family (NC7xxxx)
-          MICROSEMI: sensors (LX197xxx)
-          SONY: CXD family
-          LITTLEFUSE: diodes (SPxx)
-          TOSHIBA  the TLP serie (that were already affected during the earthquake) are very tight again
-          AVAGO : linear (MGA) ; diodes (HMS)

We suggest that you review your buffer stocks on the above items immediately and make sure you have product on hand, pull in product where possible, and also work with your favored Independent Distributors to shore up whatever shortages you may have after your respective reviews.

Monday, April 18, 2011

Hoovers Provides Detailed Multiple-Industry Overview of Japan Disaster Impact On Businesses

Hoovers has created a detailed initial broad overview of the impact of the Japanese quake disaster.  The number and breadth of industries affected is stunning if not daunting.  The reality is the impact will assuredly be felt for many months (at best) and most likely, years to come. 

See here for more http://www.dnbgov.com/pdf/Japan_Earthquake_and_Tsunami_Impact_Report.pdf

Wednesday, April 6, 2011

Many Optimistic Initial Reports Now Being Reversed

A number of chip manufacturers who initially were optimistic or even upbeat about their prospects of firing up production by March 23rd-30th have now either amended projections considerably to mid July+ or completely shut down their facilities as with the early closure of the Freescale plant originally scheduled for a December shutdown to an immediate shutdown http://www.evertiq.com/news/19342.

Epson has decided to shutter their crystal oscillator plant indefinitely.  Sony has shuttered 6 plants for the time being with no public projections announced for when this capacity will be fired back up (even partially).  Renesas has acknowledged significant damage to 7 or 9 plants and has yet to provide definitive restart projections http://www.evertiq.com/news/19123.

United Chemicon Group has 3 plants that are completely or partially shut down with none of them promising full production schedules for at least two more months http://www.chemi-con.co.jp/e/company/pdf/20110401-1E.pdf.  Even these projections are deemed by many to be unlikely and many if not most analysts have resigned themselves to the bleak reality that July resumption of full production to be the new best case scenario.

ANALYSIS:  Even if the July date does occur in some or even all the plants, that means that the production schedule will be behind a full four months on top of existing orders as well as coping with increasing demand combined with the seasonal bump in orders that historically happen in August and September to meet christmas manaufacturing demand.

These developments spell certain challenges for supply chain managers and directors at all levels of CEMs and OEMs.  As the picture starts to clarify that supply is crimped not by days or weeks, but rather months, there will be certain price increases as new foundries are built and existing capacity at competitor sites are stretched beyond capacity to accomodate the increasing world wide demand for electronic components and sub assemblies.

Tuesday, April 5, 2011

Infrastructure (read rolling black outs both scheduled and unscheduled) Remains the Monster Bedeviling the Japanese Supply Chain

SEMI**, defined below, is an electronics industry association who has seen fit to create a good source of updated information on the different factilities affected by the Japanese disaster which you may want to bookmark:  Known Impacts of the Japan Tohoku Earthquake/Tsunami on the Semiconductor Supply Chain

In their letter to the industry they have confirmed that the real ongoing issue is actually less the damage to plants but rather the considerable damage to infrastructure, namely the rolling blackouts.  As the summer comes the problem stands to be severely exacerbated by the heat and demands on the power grid for air conditioning and cooling...

**NOTE:  SEMI, defined as follows on its website:

Advancing Industry Growth and Profitability

The industries that comprise the microelectronics supply chain are increasingly complex, capital intensive, and interdependent. Delivering cutting-edge electronics to the marketplace requires construction of new manufacturing facilities (fabs); development of new processes, tools, materials, and manufacturing standards; policies and regulations that encourage business growth; significant investment in organizational and financial resources; and integration across all segments of the industry around the world. Addressing these needs and challenges requires organized and collective action on a global scale.
For more than 40 years, SEMI has served its members and the industries it represents through programs, initiatives, and actions designed to advance business and market growth worldwide. SEMI supports its members through a global network of offices, activities, and events in every major electronics manufacturing region around the world.  SEMI facilitates the development and growth of manufacturing regions by organizing trade missions and investment conferences, engaging governments and policy makers, fostering collaboration, providing market data, and supporting other initiatives needed to encourage investment, trade, and technology innovation.  In addition to supporting access to regional markets, SEMI helps its members explore diversified business opportunities and contributes to the growth and advance of emerging and adjacent technology markets, including photovoltaics, solid-state lighting, micro-electro mechanical systems (MEMS), printed and flexible electronics, and nano-electronics.

Monday, April 4, 2011

Raw Die Disruption in Japan Represents 25% of World Supply

Supply Chain Executives are set to see some significant challenges around Raw Die deliveries.  The brands most like to be impacted significantly are the fabless chip houses such as Xilinx, IDT, PMC Sierra, to name a few.  See here:  http://www.ocbj.com/news/2011/apr/03/companies-deal-japan-fallout-q2-impact/
There also appears to be a looming potential crisis in the supply of copper-clad laminate.  Japan produces 70% of the world's supply of this material which is used in the production of almost all PCB boards.

Many of the larger chip houses including ON Semi, TI, IBM, Renesas and others also procure a certain percentage of their die from Japanese sources outside of their own internal supply to supplement bumps in demand on certain product lines. 

Combine this crimp/shortage with robust demand across the board as the world emerges from the recession and you have a formula for price inflation as well as extended delivery times.  Critical processes to procurement planning in this environment clearly is a commitment of resources to crossing to secondary brands to supplement existing challenged primary component sources/brands.

We recommend every requirement for items affected, where possible, leave open the possibility for accepting crosses and replacement from secondary and tertiary brands.  Reviewing and shortening approvals for crosses is going to gain critical importance in the comind days, weeks, months, and maybe even quarters...

Friday, April 1, 2011

Infrastructure Challenges to Japanese Supply Chain Continues

Specifically to the electronics supply chain is a fact that will reverberate for many weeks, months, and maybe even years:  33% of the world's capacitors are manufactured in the affected regions!  See more on this and other supply facts relevant to the electronics supply chain challenges here http://www.businessweek.com/magazine/content/11_15/b4223012614574_page_2.htm.

As we mentioned in earlier blogs the continuing challenge is not getting production lines back up and able to produce but rather the infrastructure challenges associated with steady production:  electricity, gas, water, shipping logistics, and last but not least the radiation issues http://www.businessweek.com/magazine/content/11_15/b4223015043715.htm

It was estimated recently by scientists in France and the US, that the amount of radiation already released into the atmosphere and surrounding sea is 100,000 times more then what was released by the partial meltdown of three mile island in 1970 in the United States (and counting).  To be sure this alone will have lasting implications that cannot yet be fully understood, nor any projection models for productivity, account for...

Time will tell, however we human beings are remarkably resilient and the recovery in this instance will be no different.  That being said, the short to medium term implications can range from starkly bleak to overly optimistic.  The wise course is to plan for the worst (start using cross-brands where possible etc), as a back up and using regional purchasing arbitrage to average out the inevitable upwards cost pressures associated with this time period.