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A heavy equipment dealer changes company culture, saves $6mil

June 13, 2022 | Operational Excellence

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The client is a dealer for a renowned brand of power systems products and heavy equipment used for construction, mining, and agriculture. They also represent other leading brands from North America and Europe, making them a market leader in heavy equipment sales.

Key results

$6.1mil

Total Annualised
Savings

42%

Reduction in
inventory

$3.1mil

In-pocket savings
 

194%

Increase in customer coverage
 

The challenge

The organisation was facing problems in several segments: 
  • Inefficient inventory.
  • Poor forecasting. 
  • Low workforce productivity.  
  • Ineffective manpower planning.
  • Inadequate performance review. 
  • Bad customer service.
They wanted behavioural change in employees for sustainable results and to see improvements in cross-functional integration and communication among the departments and business units in all locations.
 

What we did

The project was divided into the following workstreams:    
  • Sales & inventory: Improvements in business development, sales forecasting and planning, sales force productivity and performance management  
  • Service: Improvements in organisational design, planning, productivity and performance management.  
The project kicked off with an analysis and assessment of gaps across the client’s operations.   We formed a project team which comprised Renoir consultants and the client’s taskforce.  The Management Action Teams (MATs) were formed by cross-functional staff led by senior managers.  Progress was rapid as the MATs met weekly to decide on process and system changes while the Project Steering Committee (top management) reviewed the roadmap, removed roadblocks and made key decisions concerning the way forward.  The workstreams designed new ways of working while stakeholders reviewed, tested and refined the processes at all levels. Upon the Steering Committee’s approval, the new ways of working were rolled out across business units in all locations. Over 400 employees received training to get them familiarised with the new processes and systems.
 

Sales improvements

  • Improved customer-call planning methodology.
  • Greater structure and transparency in opportunity management.
  • Centralised performance dashboards and regular reviews.
  • Improved utilisation of CRM.

Service improvements

  • Streamlined organisational structures.
  • Proactive and transparent manpower planning.
  • Improved work order prioritisation.
  • Clear skill matrix for technicians and supervisors. 
  • On-site quality management processes and checks.

Inventory management

  • Re-defined roles and responsibilities across departments.  
  • Streamlined order management processes. 
  • Improved data visibility via a centralised inventory management system.
  • New performance dashboards and regular reviews.

Behavioural change

Training was conducted for over 400 staff, and a behavioural audit mechanism was introduced to measure changes in behaviour and identify focus areas for sustainability and ongoing improvement.

Centralised performance dashboard 

The improvements were visible to all be it streamlined order management processes, or improved inventory management system or better sales coordination.
 

Results

Tangible results were achieved through the hard work of the teams that developed new tools through focused specific initiatives and tools:   
  • 194% improvement in account coverage. 
  • 22% increase in sales.  
  • 13% increase in gross profits. 
  • 24% increase in closed deals. 
  • 138% increase in opportunity generation. 
  • 35% improvement in annual impactable service expenses. 
  • 32% reduction in overdue work orders. 
  • 6% decrease in aging inventory. 
  • 21% improvement in inventory turnover.  
  • 42% reduction in overall inventory.
The transformation initiative introduced visible changes in behaviour and organisational culture. The constant engagement and involvement of employees in all phases fostered a greater ownership of the new systems and processes. This will help in the sustainability and continuous improvement of the ways of working.
 
* We take client confidentiality seriously. While we have kept the brand anonymous, the results are real.
 

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