Improving transactional processes and reducing costs for a distributor of CCTV products.

Norbain SD is a successful distributor of CCTV, IP Video, Access Control and Intruder Detection equipment. On two separate occasions, Collinson Grant was asked to support the managerial team in the UK.

A deterioration in trading conditions and gross margins was forecast. And a history of growth in products and customers had increased the variety of demands imposed on the operations, while causing other inefficiencies that were constraining performance.

In the first instance, we undertook a review of processes and set out recommendations:

• to define availability by product type, reclassify slow-moving stock and vary the service targets for different customers. This involved steps to agree and enforce rules for the returns process by customer group and product segment to avoid costs of return freight and administration
• to improve the management of processes for introducing new products and managing the range to reduce administration and prevent write-offs
• to reorganise the work and processes of the purchasing team according to defined standards of service. And to improve the disciplines for managing the range of suppliers
• to define processes to ensure the customer service staff became more efficient, abided by pricing matrices and made best use of opportunities to ‘upsell’
• to change the approach to repairs for certain products, particularly those sent back to suppliers in the Far East.

On the second project, particular attention was given to analysing the activity of people in internal sales. This revealed wide variations in productivity and, unsurprisingly, the more experienced people were more productive. So better training to build capability, particularly for new starters, was recommended. Again unsurprisingly, comparative analysis suggested that those who made the most calls per day tended to achieve the most quotations and orders. A review of the company’s call data suggested an opportunity to increase the time that an internal sales person spent on external calls. Only by conducting the analysis and presenting the results to the managerial team could the need for change be accepted.

At that time, the UK market had not yet shown a significant shift to ordering through the internet. However, as trading via the internet was expected to grow, we considered the opportunity to redefine processes and reduce the internal effort (and therefore the staff) in handling transactions.

The proposals were endorsed by the senior team and targets for improvement were included in departmental budgets. In the first project, annual targets of >£1m were set. The second time around, additional annual savings of £250K and margin improvements of £150K were agreed, plus a one-off cash release of ~£400K.