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ChemGrow, Inc. Essay Sample

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ChemGrow, Inc. Essay Sample

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:

Region SalesRep N P K Total shipment $14 $12 $10 Total Weightage/Criteria Total Ranking Score
 Gross Margin Earned Shipment Margin
N P K 0.5 0.5
East McFee 60 35 5 27700 232680 116340 13850 362870 13850 181435 195285
East Collam 5 20 75 73715 51601 176916 552863 781379 36858 390690 427547
East Parks 80 10 10 30700 343840 36840 30700 411380 15350 205690 221040
East Dow 100 0 0 14400 201600 0 0 201600 7200 100800 108000
East Sum 146515 829721 330096 597413 1757229 73258 878615 951872
Central Thums 80 20 0 31150 348880 74760 0 423640 15575 211820 227395
Central Cook 25 50 25 45700 159950 274200 114250 548400 22850 274200 297050
Central Block 20 30 50 17000 47600 61200 85000 193800 8500 96900 105400
Central Fowler 75 20 5 16210 170205 38904 8105 217214 8105 108607 116712
Central Sum 110060 726635 449064 207355 1383054 55030 691527 746557
NW Vans 70 20 10 33150 324870 79560 33150 437580 16575 218790 235365
NW Sciffman 65 20 15 25400 231140 60960 38100 330200 12700 165100 177800
NW Lukbore 80 10 10 29360 328832 35232 29360 393424 14680 196712 211392
NW Wilkie 20 10 70 58590 164052 70308 410130 644490 29295 322245 351540
NW Sum 146500 1048894 246060 510740 1805694 73250 902847 976097
SW Goodie 5 5 90 45284 31699 27170 407556 466425 22642 233213 255855
SW Stubber 5 15 80 29793 20855 53627 238344 312827 14897 156413 171310
SW Holden 0 0 100 43100 0 0 431000 431000 21550 215500 237050
SW Macke 10 10 70 35800 50120 42960 250600 343680 17900 171840 189740
SW Sum 153977 102674 123758 1327500 1553932 76989 776966 853954

Appendix 2: 

Region Salesperson Customer Shipments(Tons)
East PARKS PFF 13815
Central COOK JC 18280
Central THUMS YF 15288
NW SCIFFMAN HF 10400
NW VANS OFC 10550
NW WILKIE BG 15200
NW WILKIE CI 20400
SW GOODIE PGC 10762
SW GOODIE RGC 25721
SW HOLDEN GF 10125
SW HOLDEN OFS 12135
SW MACKE CF 16875
East COLLAM EPF 11070
East COLLAM FEV 14740
East COLLAM FSC 14740
    Sum 220101
Total Shipments all customers 557052

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