In a new five part series, we look at the steps businesses need to take to fully capitalize on exciting opportunities in foreign markets.
Protecting delivery reliability
Protecting delivery reliability and efficiently managing the supply chain as the business grows is difficult for any expanding business, let alone one doing it across borders. Insufficient insight or sub-optimal process organization can lead to blockages, local pooling of stock or unnecessary reservations, all of which can have a dramatic negative effect on working capital.
Ineffective or miscommunication between subsidiaries and the head office is often a major factor in this. If it’s not clear where specific responsibilities lie, a great deal of extra work is often the result. Endless phone calls and e-mails aiming to get things organized then often make things worse, missing important information that’s required for orders to be processed accurately and effectively.
The danger is particularly apparent when companies make use of shared service centers where sales support is centralized per region or time zone, and where logistic service providers are responsible for the physical completion of sales orders. The number of return orders and credit notes is a good indicator of how effectively this supply network is running.
When a company runs sales offices that are not purely self-supporting, the lack of in-house support for HR, financial, IT and other processes can quickly become a limiting factor. On a pure physical basis, it’s often simply not possible to ‘walk by’ a colleague from another department to get some extra information or an answer to a specific question.
If the right systems aren’t in place to ensure people have access to the support they need, employees will not only have to deal with continually unresolved issues, but will miss valuable interaction with the rest of the business.
Insight into stock and order information
The right balance between tying capital up on shelves and being able to meet orders is extremely challenging to achieve, but certainly a key aspect of creating a genuinely profitable operation. The confidence that getting it right inspires in your sales personnel is an important part of this.
If they feel that delivering on time is under threat, they tend to start thinking of creative (and usually unhelpful) ways to keep their promises and protect customer relationships. These can include reserving stock up front, storing up products in local depots, ordering more items than is necessary despite expiry risk, or artificially pulling forward delivery dates.
With this in mind, it’s essential that businesses invest in creating trustworthy, transparent processes around stock and stock insight. All sales personnel need to be confident that the data they’re seeing is up to date and completely trustworthy. Being able to track order status creates confidence around the office, strengthens its position in the supply chain and reduces unnecessary communication.
Complex administration causes problems
Managing administrative tasks is, for many sales employees, a challenge. As a result, agreements and conversations with customers can fail to be recorded properly, making it difficult for every stakeholder to have access to all the information that’s relevant or useful to them.
When details only exist in the heads of employees, in e-mail inboxes or piles of unfiled note papers, it’s difficult to be confident that people are always making good decisions. Difficulties take longer to address, some opportunities be missed altogether. And if it’s a customer that reports the problem, that’s then a relationship issue with further implications. Not a great situation for any operation already running on a thin margin.