Case Studies

Collections Optimization – WaterPump Manufacturers - Outstanding invoices worth ₹ 30 lakhs collected within 45 days of implementing new approach.

Challenge

A company trading in pumps was staring at a mountain of overdue invoices as customers weren’t paying on time. These issues with cash flow was restricting the company’s growth plans

Solution

  • Structure approach to collection of outstanding debt.
  • Dedicated resources appointed to handle collections.
  • Tracking mechanism implemented to measure collections on a daily basis. Invoice level payment tracking initiated.
  • Sales and Collections teams together made accountable for clearing outstanding invoices.
  • Customers categorized on basis of their payment history and customer category introduced as a checkpoint for all new orders.

Benefits

  • Outstanding invoices worth ₹ 30 lakhs collected within 45 days of implementing new approach.  
  • 40% of outstanding invoices collected within 60 days of implementation with collections worth ₹ 44 lakhs
Process for Sale Activity – Large Format Retail Garment Store - Reduction of turnaround time for activity reduced to 2 days from 4 days. This reduction led to Sale exercise being up on time.

Challenge

Our clients, a large format retail garment store, like all other retail garment stores, place their products on sale twice in a year for purpose of stock clearance. 

Here is how they would follow the process for non-branded and branded products:

  1. Process for non-branded products:
    1. The owner would go to every department and select the products series-wise and then decide the rate. Once the owner would select all the products, it was sent to the back-office department for scanning. Once the scanning was completed by the back-office department, they would take print-outs and hand them over to the respective garment sections or departments. In each department, the sales associates would then manually check each barcode printed on the product against the printed paper handed over to them. This entire activity would take almost 4 days as the product quantity would go up by 500 to 600 for every department. The associates had to check against the printed paper and then give a consolidated paper to the back-office for the products. 

This ate up a lot of productive hours and also caused delay in display of products.

    1. Process for branded products:

The parent company would give a list of barcodes and then they would manually search all those products in their shelves. 

Needless to say that this too resulted in huge consumption of time and effort and a lot of times associates would never be able to sell what they were meant to during the sale.

Thus the entire purpose of conducting a sale would be defeated.

Solution

  1. For non-branded products:
    A process was set by Effex wherein only 2 associates had to be involved. One to scan all the items to send to back-office and the second person to again scan all the items at back-office. A formulated excel sheet was design which now gives them details like difference in the quantity or any missed products.
  2. For branded products:
    A formulated sheet was devised and implemented wherein all barcodes given by the parent company were copy-pasted and this was linked with another sheet which when scanned gives us the data on whether the product is up for promotion or not.
Inventory Optimization – Electronic Components Traders - 4x increase in daily order execution

Challenge

A company trading in electronic components was facing major issues with managing their inventory (more than 35000 unique products).
Lack of an inventory management system meant delays in order execution, customer dissatisfaction and potential loss in future business due to unreliable execution timelines.

Solution

  • Inventory management system implemented: All inventory segregated, labelled and stored at pre-defined location.
  • Outdated and damaged products discarded.
  • Reorder level and reorder QTY defined for each product.
  • Inventory IN and OUT mechanism implemented.

All staff members given comprehensive training on inventory management

Benefits

  • 4x increase in daily order execution
  • 75% reduction in order execution staff.
  • All orders dispatched within 24 hours

 

Role definition & Organization Restructure – Freight Forwarders - Process streamlining & role definition led to 30% reduction in the staff (from 18 to 12) for the same workload

Challenge

A freight forwarding company was facing challenges in Order Processing. 

  • Over the years, the process of doing work had become person dependent and hence tasks could only be handled by specific individuals. The absence of these people meant that the entire workflow would come to a standstill.
  • Assigning the task to another team member would lead to errors in output.
  • There were no performance measures for any of the process steps or for people who were responsible for execution.

Solution

The Propel Problem Solving Methodology © was applied to get to the root cause of the situation & design the solution

  • Workload assessment done for all team members to understand their role & workload. 
  • Cross functional training done for all team members to get them skilled on all processes. 
  • Assigned team leaders for each process to ensure work allocation, seamless communication & timeliness of output.
  • Role for team leader and team members defined for role clarity.
  • Processes studied end to end and optimized such that nonvalue add steps were eliminated. 
  • Briefing / training sessions conducted with the team to get them updated on the changes.

 

Benefits

Quality Net Income (Impact):

  • Process streamlining & role definition led to 30% reduction in the staff (from 18 to 12) for the same workload
  • Turn around time improved significantly as there is “zero” wait time in Order processing
Sales Planning – WaterPump Manufacturers - Sales increased by 24% in FY2018-2019 compared to previous year (from ₹4.87Cr to ₹6.02Cr)

Challenge

A company trading in water pumps was facing stagnating sales situation.

  • The competition had increased over the years and was eroding the profit margin on their star products.
  • Sales executives were facing challenges getting orders

 

Solution

A workshop was conducted with the Business Owners on the Propel Business Modelling Canvas © and a detailed plan of action was prepared.

  • Sales Data was analysed to identify:
    • Focus customer segments
    • Focus products
    • Focus markets
  • Clients conducted field visits to meet key customers & suppliers and gather inputs and feedback on certain crucial aspects
  • The Propel Sales Optimization Techniques © were incorporated into all Sales activities.
  • Briefing / training sessions conducted with the Sales team to get them updated on the changes.
  • Weekly Review mechanism was setup for understand performance
  • Propel Sales Scorecard © was implemented along with performance incentive structure.

Benefits

Quality Net Income (Impact):

  • Sales increased by 24% in FY2018-2019 compared to previous year (from ₹4.87Cr to ₹6.02Cr)
  • Product portfolio was optimized on the basis of Demand and Profit & low margin-low demand products were sold off & then removed from the product catalogue.
A TV shopping company - Dispatch time reduced to 6 hours

Challenge

A TV shopping company that advertises its products on TV and takes immediate orders via phone, email and SMS had a challenge of returns. These returns would eat up on the margins of products sold.

Solution

Detailed study of the stated problem was done by interviewing customers who bought and who returned. Analyzed the data to understand which products had highest return and in which geography. Identified the single most reason for return was impulse buy coupled with delayed delivery. Based on the data analysis we targeted to achieve the delivery time of <24 hours on certain products and geography and <48 hours on others. Streamlined order to delivery process to improve turnaround time.

Benefits

  1. Dispatch time reduced to 6 hours in areas with stockiest and 20 hours in other parts. reducing returns by 53%
  2. Improved dispatch frequency by 100%
  3. FTE Saving of 5 Lakhs
Purchase Management - Increase in sales by 21%

Challenge

A garment retail company carried out purchases for their stores twice a year to keep up with new trends. The sales heads would tour to purchase, apart from buying the right products, they would end up buying based on credit available with the vendors, cash they have in hand and their personal choice which would then result in an ever increasing dead stock.

Solution

Trend analysis was carried out for each of their product segments to understand the sales pattern. Segments were divided to identify High Profit – High Demand, and Low Profit – High Demand products. Mathematical model was created keeping in mind recent  trends to arrive at minimum stocking level and maximum quantity to purchase for each segment. Purchase plan was developed in accordance with the model.

Benefits

  1. Reduced portfolio of products earned market reputation in specific segments increasing sales by 21%
  2. New entry to dead-stock dropped by 93%
Order Management - Improved efficiency of sorting 200%

Challenge

A company in to manufacturing of optical frames got a large government assignment of 2.5 lakh frames in 3 months. This was impossible to do with the team strength of 25 people.

Solution

Entire scope of work was process mapped. Failure Mode Effect Analysis was conducted and the process was optimised with automation using MS-Excel. Inventory was completely digitised and mapped at rack and box level. Software was designed and deployed once the process was fine-tuned and stable.

Benefits

  1. Improved efficiency of sorting 200%
  2. Saved 15 man-days per month on sticker printing activity
  3. Reduced packaging turn around time by 40%
  4. Order execution from warehouse now is done in less than a minute
Performance Scorecards - Reduction in turn around time by 34%

Challenge

A manufacturing company had target setting done only for sales and their incentives were percentage of sales orders booked. This lead to the following:

  1. All other departments demanded performance incentives sighting high pay of sales team
  2. Sales orders were booked to meet targets with high credit period offer creating cash flow crunch
  3. High expenses were incurred for sales

Solution

Work type of all departments was evaluated, performance parameters were designed and agreed upon for each department. Parameters were divided into Qualifiers and Focus. Qualifier parameters are those where if target is not met incentives will be zero, no matter the performance on other parameters. Targets for each performance parameter was set keeping in view the recent performance and a point based scorecard system was designed for incentives across all departments

Benefits

  1. Performance based incentives were created – lead to reduction in turn around time by 34%
  2. Credit period offered came under 3 months
  3. Sales expenses reduced by 8% whilst sales jumped by 12%
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