- \n
- Product line extensions and proprietary packaging concepts were regularly introduced by a Sales department that insisted its top customers \u2013 Wal-Mart, Target, Kroger \u2013 demanded \u201cbrand news\u201d. In reality, of the 180 SKUs that had been introduced the prior year, 75 percent of them were not sold by the company\u2019s top 32 customers<\/em><\/li>\n
- Of the 375 corporate accounts, the bottom 190 accounted for less than 1.25 percent of sales<\/em><\/li>\n
- Half of all revenue came from seven accounts<\/em><\/li>\n
- Half of all revenue came from just 19 of over 900 SKUs (one SKU generated 18 percent of revenue)<\/em><\/li>\n
- Production costs were calculated and allocated using formulas unknown by the plants\u2019 Accounting departments, and by only a handful at corporate<\/em><\/li>\n
- Production managers were measured on daily operating costs, while Sales and Marketing were incented on \u201cGross Sales Volume\u201d across the entire portfolio of SKUs<\/em><\/li>\n
- New products were approved \u2013 and existing products maintained \u2013 based on meeting a specific calculated threshold:<\/em><\/li>\n
- Executives in every functional area admitted that the calculation\u2019s inputs were either subjective or unverifiable<\/em><\/li>\n
- The metric was impossible to determine once a product went into production<\/em><\/li>\n
- If the threshold was not met during development, Marketing voted whether to launch the product anyway<\/em><\/li>\n<\/ul>\n
During the report-back, the Vice President of Marketing stopped the consultants dead in their tracks:<\/h3>\n
\u201cOther than the fact that we don\u2019t track our individual product performance, we can\u2019t determine our customer profitability, and our manufacturing costs are calculated in a black box, you would have to agree that we\u2019re doing everything right?\u201d<\/strong><\/h3>\n
It\u2019s probably obvious, but interest in our recommendations was nil. Even the manufacturing team \u2013 those that hired us to uncover these issues \u2013 ran away as if we were the Knights of Ni.<\/h3>\n
- Of the 375 corporate accounts, the bottom 190 accounted for less than 1.25 percent of sales<\/em><\/li>\n
![\"people\"](\"https:\/\/b-spoke.net\/wp-content\/uploads\/2016\/08\/people.png?w=300\")
<\/a>basics wrong they could get nothing right. Why were they so recalcitrant? What prompted their abject refusal to respond to our intervention?<\/p>\n![\"complexity\"](\"https:\/\/b-spoke.net\/wp-content\/uploads\/2016\/11\/complexity.png?w=300\")
really \u201cpainful\u201d. They were producing a product loved worldwide for an iconic brand. So what if it took more time to find the pallet of special packaging than it took to run the job? The machines were at capacity and orders never cancelled.<\/h3>\n![\"run-away\"](\"https:\/\/b-spoke.net\/wp-content\/uploads\/2016\/11\/run-away.jpg?w=300\")
to improve on an already-acceptable process. Challenging the status quo \u2013 up to and including eliminating beloved products \u2013 ought to be encouraged; a culture that equates questioning the current state with accusations of failure will continue to struggle.<\/p>\n