ChemGrow, Inc.

Situation Analysis:

ChemGrow is one of the largest fertilizer companies in the world. The company has shifted from producing basic NPK fertilizers in small plants to specialty fertilizers in three large and sophisticated plants. ChemGrow is yet to implement an enterprise solution to manage its business, and hence data is available as stand-alone legacy lists. Making decisions in this situation is highly irritating for the top management. Every decision made that requires data analysis is done on an exigency basis.

The management has to decide on the most productive region, the best salesperson and the most valuable customer to reward them and the data available has to be analyzed and a decision has to be arrived at in a fair and logical manner. At the same time, for implementing a data management system or an enterprise solution, the company needs to first know what type of reporting it must have to evaluate and make decisions.

Criteria

Best Sales Person

Shipments alone can not indicate outstanding performance, but also the amount of gross margin the person is bringing into the company. So the criteria are Gross Margins earned and total shipments during the year, with equal weight given to both.

Best Region

In this award also, both gross margin earned and total shipments during the year have to be considered. Also, performance of each sales person has to contribute more or less equally to the region’s sale. It should not be that one sales person has done extremely well, and hence the region is the best. All round performance should be properly weighted.

Most Valuable Customers

The most valuable customers are those that have lifted the most tonnage from ChemGrow. At the distributor or agent level, the company can not look at realization as every distributor would have bought more of what is required in the region, rather than purely on the margins alone.

What reports are needed for Sales Decision Making?

The reporting in any sales organization must capture data at the field level, and go on getting refined to the top level management. The metrics of measuring the effectiveness and efficiency of a salesperson and hence the volumes achieved through him are of primary importance to the account managers or the middle level managers. At the top management level, what is very important is measuring the profitability of the business, the micro and the macro environment, accountability and metrics for middle level managers. 

Recommendations

Best Sales Person

Collam, the sales person from the Eastern Region has earned the most margins for the company, and also the most shipments to customers are from him. (Appendix 1)

Best Region

Even though the NW Region and the Eastern Region are almost equal in shipments, when it comes to gross margins, NW Region has done better due to its better product mix. So, the NW Region is the Best Region. (Appendix 1) 

Most Valuable Customers

The top 15 customer for ChemGrow are listed in Appendix 2. According to the customer wise shipment data, 40% of all shipments are contributed by these 15 customers, out of a total customer base of 87. The top customer is RGC, handled by Mr. Goodie of South West Region at 25721 tons. 

What reports are needed for Sales Decision Making?

1. Sales person productivity report
2. Sales person effectiveness report
3. Sales person score card to optimize margins and maximize shipments
4. Sales person order book report – to forecast
5. Market share and competition activity report for each sales person on a weekly or monthly basis – to plan promotions
6. MIS report for Middle Managers and Vice President on a weekly basis

All these reports must be refined as it is communicated up the management ladder. Hence, the Vice President and the top management will be able to take informed decision on the sales front.

Appendix 1:

Appendix 2: