Lean Management is a practice that assesses the expenditure of resources associated with any organizational process. If a step within a process does not advance the cause of creating value for the organization, it becomes a target for elimination. Most of us are well aware of the principles of lean manufacturing and lean thinking. As a result of the Toyota Product System introduced in the 1980's and the lean concepts, tools, and techniques that it embodied, manufacturing was forever changed in this country. Since the early days of lean processes, the overall rise in quality in most products and the commensurate fall in the general cost of manufacturing these products is well known. Globalization of labor has contributed to lower costs over the past couple of decades as well. Hence, the combination of global sourcing of labor and the commonly accepted principles of lean thinking have produced a global manufacturing environment that today delivers unprecedented levels of high quality products at relatively low cost.
This evolution in lean thinking has also extended into the supply chain. Today, it's common practice for manufacturers to tightly integrate design, business processes, and technology with key suppliers.
But what about the distribution side of the enterprise? How has lean thinking impacted the sales and service functions in indirect sales channels? How have manufacturers who rely on independently owned and operated dealers MaxiCOM MK808, VARs, distributors and franchisees applied lean thinking?
It's been our experience that lean thinking has not yet been deployed to benefit the sales channels as it has in supply channels and within the manufacturing function itself.
One of the basic tenets of lean thinking is to start by identifying who your customer is. In an indirect sales channel model, there are actually two customers. The first customer is the end user of a product. It's the farmer who buys the tractor, or the fleet manager who buys the forklift and now has to deploy and maintain that fleet. The second customer is the dealer who sells and services those products for these end user customers.
The perception of quality is defined differently by both of these customers also. The end customer tends to define quality based on the product itself - he/she relies on that product to perform a function and it becomes the basis for how satisfied they are with the product. However, quality is defined by dealers very differently. Sure, the product you're asking them to sell must be a high quality product. However, quality is defined more by how easy it is to sell and service that product. This "ease of doing business" dimension is what manufacturers need to focus on when defining quality for their dealer networks.
4Core: The Four Core Components of Effective Channel Partner Support
Companies that experience the greatest financial gains from their dealer networks have found there to be four key components of support that must exist to properly support the extended sales enterprise:
Marketing and Communication - Supporting dealers by keeping them well informed is mission critical. Getting the right message to the right person, at the right time and without overwhelming them, is the key challenge here. Dealers get bombarded with random inconsistent messaging. This is particularly challenging in "non-captive" dealer networks, where dealers sell more than one competing brand. Get this one right with your dealers, and you will gain mindshare.
Training and Certification - Providing certification programs and processes that are efficient, timely, and effective is also mission critical. Today's products are highly complex. Think computerized forklifts, fly-by-wire construction vehicles, emissions-friendly trucks, etc. This rising complexity of products has driven the need to assist dealer salespeople in communicating value propositions effectively to end buyers. It has made it more challenging to provide service technicians with the skills to fix and maintain these complex products autel mk908. Training and certification is the standard by which a manufacturer knows that the salesperson and service technician representing their brand knows what they're doing. Get this one right and you will raise the engagement level with your dealers, and customer satisfaction numbers will soar.
Collaboration - Technology has evolved such that collaboration at scale is now possible. The proliferation of the Internet, boosted by society's rapid and global acceptance of social networking tools, has enabled a capability for manufacturers to facilitate global collaboration. There are three types of collaboration in a dealer environment that are essential today: between experts at the manufacturer and practitioners at the dealerships; between practitioners across dealerships (crosstalk); and between the dealer or manufacturer and the end customer. If this 360-degree collaboration environment is installed, knowledge transfer and learning will permeate the extended enterprise.
Measurement and Incentives - Being able to accurately measure things that matter means having an ability to make better decisions. For example, knowing the average time to ramp up a new salesperson is essential to reducing that time by cutting waste (a lean principal). Correlating separate measurements within dashboards and other monitoring tools allows correlations to be made for studying cause and effect. For example, being able to correlate an increase in sales within a dealership to reduced ramp up time of new sales people provides invaluable feedback to management. If we can measure these things accurately, then we can reward those who exceed the standard. Incentives play a key role in driving results, especially in an indirect dealer network environment. Incentives without measurement are simply a waste of resources.
Integration and balance is key, unfortunately disjointed delivery of dealer support is often the norm
All manufacturers conduct these four activities in some way, shape or form. Today, the norm in manufacturing often looks like this:
Marketing and Communications - The marketing function handles marketing and communication, pumping out volumes of messaging, promotions, and other collateral to the dealer network.
To make efficiency gains within Indirect Channels such as dealer networks, VARs and franchise systems, it is necessary to apply Lean Methodologies, including a practice of Solutions Integration. In part II of this series, we will describe the benefits of such a practice, suggestions for best practices and a "How to Get Started" Game plan.
Author is an independent writer and blogger focused on finding the perfect business solutions for modern businesses. He writes interesting articles that aims to promote better partner portal solutions. Visit
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