Exceptional Results in Revenue Growth

THE CHALLENGE

After successfully implementing changes boosting their manufacturing capacity, this pharmaceutical contract manufacturer sought assistance to maximize the returns of the additional capacity.  Initial analysis showed opportunity for improvement within product margin and mix, sales processes and system tools to manage sales activity.

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THE RESULTS

The results of the project were impressive:

• 4.6 to 1 ROI compared to a required result of 3.6 to 1
• 29% improvement in profit margin
• Achievement of a cash-flow positive position 5 weeks ahead of schedule

Several critical improvements were undertaken in product mix, processes, systems and management behaviors to achieve these results:

Product

• Comprehensive analysis of margins by SKU resulting in a revised focus amongst Sales Reps adding or subtracting emphasis within the current product mix
• Implementation of a margin review process to determine actions plans for low margin SKUs
• Implementing additional communication between operations and purchasing in the early stages of product development to gain greater visibility into future profit margins

Process

• Formally defining activities in the sales process
• Improving the effectiveness of lead generation and follow-up
• Redefining expectations around trade-shows to generate a more significant ROI
• Redesigning Customer Service activities and responsibilities mandating outbound calling
• Shifting maintenance of C and D-level accounts from Business Development to Customer Service
• Investing capacity resulting from improved sales activity and reduced low-priority account maintenance into active pursuit of new business

System

• Installation of quarterly, monthly and weekly planning tools to determine required resource levels / resource scheduling
• Designing a system to measure newly-defined selling activities at regular intervals to gauge sales progress
• Segmenting account follow-up frequency according to customer size and order frequency
• Implementing Operating Reports to provide forward visibility into expected sales returns and variances allowing for advanced corrective actions

Behavior

• Revision of a sales incentive program to reward new business volume and higher margin rates
• Creating clear sales activity requirements on a daily basis to ensure appropriate attainment of key funnel activities
• Formalizing follow-up and review processes to actively manage the performance plan
• Establishing formal definition of a process to elevate and action any barriers to converting New Business into a sale