Google
WWW http://www.tomingraminc.com

TOM INGRAM AND ASSOCIATES, INC.

HBC Associates HBC Manufacturer Tools, Help Results and Paybacks for Clients Master Chart* Books, Articles, Case Studies, Newsletters, "How To" Tools, Success Stories* About Us Tom Ingram and Associates Home

 

Health Beauty & Cosmetics Manufacturers: 

How to Increase Sales and Reduce Costs

 

(299)  Stop The Promotion Madness in HBC: A Call for Action and Research

(300)  Cosmetics Success Stories Summary

(302) Outsourcing of In-House Merchandising Summary of Success Stories

(303)  Data Driven Success Stories

(304)  HBC Merchandising Success Stories Summary 

HBC Merchandising Success Stories* by Our Associates

(1) Distribution Increased by an Average of 7%, Some Products Improved by 16.5% for Same Cost as Previous Year by Outsourcing Oversight of Merchandising. Freed Up 1800+ Hours of Manufacturer’s Time Per Year (approx.).  Allowed Manufacturer to Focus on Growth, Instead of Managing Merchandising*.  Associate firm saved manufacturer $150,000 on previous year’s budget of $1,000,000 (approximately).  Reinvested savings in better merchandising to achieve improvements in distribution, void reductions and out of stock reductions.  Other results included:

  • Coordinated merchandising effectively with major TV ad campaign
  • Used store volume and market data to create a store grading system to help spend merchandising dollars only in stores with the best payback
  • Renegotiated merchandising service contracts for immediate cost savings and conducted RFP process to select new service providers
  • Produced monthly stock level scorecard and list of worst stores to help manufacturer deal with problems and opportunities at retailers
  • Created audit / mystery shopper program to confirm conditions in stores
  • Helped manufacturer develop overall processes and disciplines for effectively managing merchandising

(MD CB)  Category:  Diabetic, Diagnostic, Medical

(3)CASE STUDY: Freed Up 63,000 Sales and Support Hours Per Year, Cost Reduction, Solid Processes and Execution*:  Associate led effort for one of the three largest merchandising organizations in the U.S.  Resulted in $2.5 million per year in labor savings, a nation-wide set of standard processes and removal of 250,000 potential errors per year.  Click link for details. No31cSalesProcessImprovementSuccessStoryShortV2.pdf  Category:  Headquarter Call, Merchandising Process Improvement

(4)Manufacturer Outsources Merchandising Work, Improves Execution from 90% to 98%, Saves $750,000 to $1,250,000 (estimated*):  Associate led team that took over $25 million in merchandising work for the manufacturer.   Associate conducted analysis that showed that manufacturer was overlooking significant costs.  Salary and benefits for 1,200 reps were reduced by 20%+ (estimated.)  Entire program was deployed in 90 days.  Manufacturer was confident enough in the Associate's team that it provided up-front cash to fund the initiative.  Goal was to provide the same or greater levels of service at a reduced cost.  Program continued successfully for many years.    Success Story Details                                                              Short Video on Success Story (CS)  Category:  Pharmaceutical, Drug, OTC, Convenience

(7) Consistent Planogram Compliance, New Item Speed to Shelf, during High SKU Count, Complex Reset Work (Cosmetics).  Results Were So Strong, Program Was Repeated 8 Times.  Key Was Getting It Right With Minimum of Manufacturer's Time*Associate led programs for Planogram compliance for entire new marketing efforts for the manufacturer.  Work involved extremely high sku count, complex racking, heavy resets, 20-24 hours per section.   Included videos to train reps, practice sets, 5-6 month planning and coordination cycle and working side by side with manufacturer. 

·         Chosen by Wal*Mart to coordinate all manufacturers for the changeover of an entire cosmetics department

·         Chosen by L'Oreal and Procter as exclusive merchandising company for 4 years running.

·         Consistently met seasonal deadlines.  (LC)  Category:  Cosmetics

(8)New Item Speed to Shelf:  New Item on Shelves in 20,000 Stores in Two Weeks!  Effort was So Successful, it was Repeated 5 More Times.*  As president, associate led multiple new item launches where a prescription drug was being converted to "over the counter."  These launches required 20,000+ stores to be merchandised in two weeks, a 5-6 month planning and coordination cycle and working side by side with manufacturer.  Associate's firm did several additional launches for the same manufacturer and others, totaling 6 major launches.  Extremely difficult work to execute in so short a time frame.  (LC)  Success Story Details  Category:  Pharmaceutical, Drug, OTC,

(10) Bundling Multiple Store Calls Together To Make Merchandising Affordable for Smaller Manufacturers*:  Associate bundled together merchandising calls from several  manufacturers to make effort affordable for all.   Resulted in e.g. a blitz effort for a major personal hygiene manufacturer.    (TE)  Category:  HBC, Drug

(11)  New Item Speed to Shelf, Taking Over Where Other Merchandising Organization Failed, Warehouse Sold Out in One Week!*:  Associate led effort for a major pharmaceutical manufacturer to complete a new item introduction after failure by  previous merchandising organization.  After one week of execution on the launch, manufacturer called to say that inventories were depleted in their warehouses due to the surge in sales.  Manufacturer credited the sales surge solely to the speed to shelf execution.  (TE) Category:  Drug                                                      

(13)  22% Annual Increase In Diaper Sales For 56 Store Chain, Completely Displaced a Competitor in 3 Weeks! Associate’s team discovered extreme dissatisfaction with a diaper manufacturer.  Associate went to a competitive diaper manufacturer, jointly developed a new planogram, closed retailer and completed resets in three weeks, completely displacing the original diaper manufacturer.  (DK) "Success Story 16 Details" PowerPoint and Interview with DK - see page 14  Categories:  HBC

(14)  Bundling Multiple Store Calls Together To Make Merchandising Affordable for Smaller Manufacturers,  Health and Beauty Category*:   Associate was able to negotiate an agreement with three manufacturers to make merchandising calls affordable for all.  Through careful scheduling and knowledge of local conditions, reps with right skills and field management structure that was able to execute, Associate’s team was able to  consolidate the work so that field rep got all the work done for three manufacturers in a single one hour call.  (DK)                            "Success Story 17 Details" PowerPoint and Interview with DK - see page 15   Category:  HBC

(15)  Gained Approximately $11.1 Million in Incremental Cosmetics Sales for Manufacturers in One Year, Took 30% of Shelf Space Away From “No-Show” Competitors.  Bundling Multiple Store Calls* Associate discovered that a competitor’s merchandising team did not show up for a 210 store cosmetics reset.  Associate’s team was able to convert 30% of competitor’s shelf space to their manufacturer.  See discussion of clustering in health and beauty success story.  (DK)               "Success Story 18 Details" PowerPoint and Interview with DK - see page 16  Categories:  HBC, Cosmetics

(17)  Bundling Multiple Merchandising Calls, Coordinated 13 Manufacturers for Mass Merchandiser Cosmetics Resets*  42 feet of shelf space was reset at all stores.  Associate led team.  (JV)   Category:  Cosmetics

(19)  Duplicate Removed

(21)  $125 Million in Additional Sales for Manufacturer by Reducing Out Of Stocks by 5% (estimated),  $1 Million Cost Savings through Outsourcing of In-House Merchandising Team.*  Associate managed the team and its P&L.  Achieved approximately 5% reduction in Out of Stocks (key goal of the effort) and saved manufacturer $1 million per year in merchandising costs at the same time.  (Manufacturer’s sales are about $4.5 Billion.  We are assuming that a 5% reduction in out of stocks will result in additional sales of approximately $125 million.)  (PL)  Categories:  HBC, Feminine Hygiene, Paper, Diapers, Variety

(22)  20% Improvement in New Item Speed to Shelf.  Shared Merchandising Teams (Broker Coverage) Not Getting Job Done.  Established Dedicated Team Program for Fortune 500 Health and Beauty Manufacturer in Mass Merchandising (Wal*Mart) and Drug Channels*.  Syndicated model being used was falling short in out of stocks, void fills and display compliance.  Also provided greater flexibility for manufacturer's seasonal needs.  New Item improvements were measured by ACV against non-covered stores.  (PL)  Categories:  HBC, Suncare, Footcare, Over The Counter Drugs

(23)  $4,307,000 Sales Increase Through Out of Stock Reductions. Established Dedicated Team Program for Fortune 500 Paper Goods Manufacturer.*  Specific Goal Was Out of Stock Reductions.  In-stock percentages grew from 99.23% to 99.67%.   Ultimately added promotion compliance and store level selling to the program.  (PL)  Categories:  HBC, Feminine Hygiene, Paper, Diapers, Variety HBC

(26)  Promotion Compliance:  Developed Program at Wal*Mart for  Auditing Stores for Compliance with Promotions*.  Marketing department had no history or baseline to judge promotions from.  Current effort is to establish the baseline.    (PL)   Category:  Wal*Mart

(27)  Manufacturer Saves $10 Million, Compliance Improves 135% by Outsourcing In-House Merchandising Team.  Immediate Savings Of 32% Per Visit. Employees Reduced from 400 to 40*.  Associate led effort to reduce internal merchandising staff of 400, which called on 8,000 locations servicing high sku count products.  The in-house team was not performing for a number of reasons, including the rep’s inability to be effective in two different chains at the same time.  (E.g. Wal*mart and Macy’s.)  (JF)  Categories:  HBC, Intimate Apparel

(28) Manufacturer Saves $2.5 Million over 5 Years, Improves Distribution 4%, Reduces  New Item Speed to Shelf by 30 Days, Increases Displays Sold by 17%, through Outsourcing of In-House Merchandising Team (estimated).*  Associate led effort that outsourced the work of 250 full-time people to a 3rd party.  65% of the manufacturer’s employees accepted positions at the 3rd party at a reduced salary.  Reporting capabilities for account management team also were improved.  (PL)   Category:  Cosmetics

(29) Manufacturer Saves $20 Million, Increased Sales $225 Million (30%) Over Five Years by Outsourcing In-House Merchandising Team*.  Associate led effort to outsource struggling in-house merchandising team, including disposing of fleet and using multiple external services.  In-house team was struggling due to rapid growth of brand and distribution.  (JF)  Categories:  HBC, Intimate Apparel

(30)  4% Increase in Dedicated Team Sales Test In Texas vs. Other Tests*.  Associate led team that sold, implemented and delivered the project.  (PL)  Categories:  HBC, Smoking Cessation, Over The Counter Drugs, Lip Care

(31)  $59 Million Incremental Sales for European Grocery Wholesaler In One Year by  Reducing Out Of Stocks and Voids through Data-Driven Merchandising.  Should Increase for Next Several Years*.  Distributor had been using data to identify problems in retail stores for years (voids, out of stocks, new items, promotion compliance.)  Problem was that the distributor’s manufacturers, retailers, brokers and merchandising companies “owned” responsibility for resolving the problems (and the job was not getting done.)   Goal for first year of program was a 2% improvement ($80 million.)  Achieved $59 million improvement due to the data-driven merchandising solution (quote from distributor.)  Note that these are hard dollars of increased sales from products that are authorized to be on shelves, but are not there.  Associate sold project and designed approach that produced results.  (DK)   Category:  Wholesaler Sales Increase, International

(33)  $1.7 Million+ Savings On Merchandising Work.  425,000 Hours of Merchandising Services Provided at 20%+ Cost Savings Through Data-Driven Merchandising.   Demonstrated that targeted project work produced a better ROI for manufacturers and retailers than generic continuity work.  Had to become good at dealing with a fluctuating work load, using part time work force.*  Grew base of business from 72,340 hours per year to 425,531 hours per year over five years.  Growth came by transitioning from continuity work to project work.  Included Hair Care Resets for 6 years running, cosmetics resets at one mass merchandiser and becoming the preferred provider at another mass merchandiser.  Discovered that Project work was often 20% to 25% more cost-efficient than continuity work because of significantly less drive time.  Had to become good at dealing with a fluctuating work load.  Transitioned to part time work force.  (JV)  Categories:  HBC, Cosmetics

(35)  Distribution Increased From 80% to 96% In Five Months Through Data-Driven Merchandising Program*.  Confidential program, call for details.  (JS)   Category:  HBC, Medical, Small Appliance

(36)  Distribution Increased From 94% to 99% In Five Months Through Data-Driven Merchandising Program*.  Confidential program, call for details.  (JS) Category:  HBC, Personal Care

 

(39)  $3.2 million Sale of Specialized Merchandising Services to Assist New Chain Owner in:

1.    Identifying Inventories, Fixtures, Square Footage, Layouts Of Newly Acquired Stores

2.    Designing Marketing and Merchandising Programs to Best Use New Stores

Retailer:  Large Drug Store Chain

Problem: The Drug Store Chain had acquired a number of other Chain Stores.  The new owners did not know inventories, fixtures, square footage, layouts, aisle widths, etc.

Sales Cycle Notes:  Associate was introduced to prospect by his service company, led the proposal and presentation efforts, multiple meetings, instrumental in closing the sale due to his experience and specialty skills

Solutions Notes: Solution was a systematic store by store program to survey all stores and collect and organize the needed information.  The solution included training and a software system.  Project was approved and started in August 2007. 

Category:  Drug  (PG)

 

(48)  Results:  Big Results On Small Budget.  $800,000 in sales gained in 17 weeks on First to Market Launch of Fat Free Pringles.  Gained a 32% market share with a company that typically earned 9%.

Retailer:  National Drug Company

Problem: Proctor and Gamble was launching a new Elestra product with Pringles and needed retail merchandising. 

Solution Notes: Provided a complete new launch program for logistics, marketing, in-store programs, advertising and merchandising with a limited budget,  Worked with all aspects of the company to ensure product was in-stock and displayed for success. Developed a competitive program in-store, at distribution center and by operations to incent for high sales and margins.

Category: Drug   (PG)

 

(49) Results: $0 to $70 Million Year Sales in One Year – Just In Wal*Mart!  Got to 90% ACV Distribution in 3 days in Wal*Mart and in 5 days nationwide!

Manufacturer:  Fortune 25 HBC Firm

Problem: Normal product launches were taking 8-10 weeks to get 90% ACV distribution.  In addition to delayed sales, slow launches waste TV ad dollars and waste inventory dollars because product is just sitting.  This was launch of new men’s body spray / cleansing gel line.  New product line had “no functional value – all about belief in self.” 

Solutions Notes:   Used little advertising – went to viral marketing instead.  Launched in Men’s Clothing department, near Skateboards, and near Computer Games.  Went to entirely new launch program based on quality improvement and other cycle time reduction techniques 

Category:  HBC  (PP)

 

(50)  Results: Consolidating 45 SKUs to 12 and Regional / Seasonal Focus Results in Significant Sales Lift – 3 Times per Year!

Manufacturer:  Fortune 25 HBC Firm

Problem: Lagging sales in Skin Care product line

Solutions Notes: Went from 45 SKUs down to 12.  Reduced to just the fundamentals of what the end customers wanted.  Went to a very strong balance between Headquarter Sales side and Retail Execution / Merchandising.  Regional focus during the Sun Care Season

Category:  Skin Care  (PP)

 

(51)  Results: Combined Three Sales Organizations, 1,000+ People, Reduced Headcount to 400, Brought Cost of Sales Down From 5% to 2.2%, Reduced Trade Funds (Promotion Expense) From 18% of Sales (Some Categories at 24%+) Down to 12% of Sales While Simultaneously Growing the Business 4.5% in Year One and 3% in Year Two.  (Market was growing at only 2%).

Manufacturer:  Fortune 25 HBC Firm

Problem: Merger of three organizations created redundancies, waste.  Promotions were consuming 80%+ of time and money, only producing 25% of the sales.

Solutions Notes: "Stopped the Promotion Madness".

Category:  HBC  (PP)

 

(52)  Results: New Major Product Launches Achieving 85% ACV Distribution In Two Weeks Instead Of The Normal  8-10 Weeks

1.    Toothpaste launch - $0 to over $100 million in one year

2.    Shampoo launch - $0 to over $100 million in one year

3.    4+ other product launches - $0 to over $100 million in one year

4.    8+ product launches from $0 to between $20 million and $100 million in one year

5.    A Key Additional Benefit:  Success or failure information is available in 2 Weeks – instead of 2 Months!  Allows manufacturer to pull the plug, invest more or redirect immediately – rather than after millions have been wasted

Manufacturer:  Fortune 25 HBC Firm  (PP)

Problem: Normal product launches were taking 8-10 weeks to get 85% ACV distribution.  In addition to delayed sales, slow launches waste TV ad dollars and waste inventory dollars because product is just sitting. 

Additional Results Notes:  Benefits:  Product selling immediately instead of sitting in the warehouse, Forecasting improves, Inventory and Return is substantially better.  You know your product’s success or failure in 2 weeks.  Two examples of success:  Both a Specialty Toothpaste and a new Shampoo reached $100 Million plus in Year 1.

Solutions Notes: Since 2000, Associate has led approximately two dozen Major Product Launches which have reached 85% ACV distribution in two weeks (some in one week) versus the previous 8-10 weeks to get to 85% ACV distribution. 

Category:  HBC  (PP)

 

(55) Helped Fortune 500 Manufacturer Penetrate Drug Channel and Mass Merchandising / Wal*Mart Channel.  Manufacturer Had Been Unable to Penetrate On Their Own*.  Associate led effort based on existing relationships,  “fact based selling” and showing retailer how shelf space could be better used.    (ML)    Category:  Drug, Wal*Mart

(56) Helped Fortune 500 Manufacturer Penetrate Convenience Store Channel and Military Channel.  Helped Manufacturer Improve Their Relationship and Penetrate the Channels *.  Associate led effort based on existing relationships,  “fact based selling” and increasing category depth for manufacturer.    (ML)    Category:  Military, Convenience

  

(59) Outsourcing In-house Merchandising Team

  • $100 Million+ Sales Gain over Multiple Years
  • Phase 1 Cost Savings of $1,700,000 Savings Per Year (Approx.)
  • Reduced Average Hourly Cost (including overhead) from $38 per hour to $26 per hour for 76 people.
  • RIGHT FIELD MERCHANDISER IN RIGHT PLACE, WHEN NEEDED:  Increased Store Visits by 25% for Same Budget Dollars (Approx.)
  • BIG BENEFITS FROM LONG TERM PROGRAM:  Manufacturer Was Acquired, but Director of Retail Merchandising Continued Running Program for Acquirer, Continuously Improving Results Over the Years.  See additional success stories for same program:
  • Comprehensive Training Makes The Difference.
  • Ultimately Reduced Full Time Staff by 50%. (DY MH)

Category:  HBC, Near-HBC

Details:

http://www.tomingraminc.com/OutsourcingInHouseMerchTeam1.pdf http://www.tomingraminc.com/MajorProgramSuccessGeneric.pdf http://www.tomingraminc.com/HolidayCompliance17PerIncrSalesv2.pdf http://www.tomingraminc.com/NoOneSelleratWalMartv3.pdf http://www.tomingraminc.com/AggressiveSellingPalletManualOrders.pdf  http://www.tomingraminc.com/OutsourcingInHouseMerchTeam1.pdf http://www.tomingraminc.com/AggressiveSellingTipsFromBest.pdf

 

(60) Outsourcing In-house Merchandising Team

  • Cost Savings of $7,000,000+ Per Year (Approx.)**
  • $38.5 Million Sales Increase Per Year from 5.5% Market Share Gain (Taken from #1 Competitor! – Approx.**)
  • New Product Cut-In Rate Raised from 70% to 99%+
  • Fixed Costs Moved to Variable Costs, Shared With Other Manufacturers
  • 65% Full Time / 35% Part Time Work Force Changed to 30% Full Time / 70% Part Time  (DY MH)

Details http://www.tomingraminc.com/OutsourcingInHouseMerchTeam2.pdf

 

(64) Results: Achieved 96% compliance in use of bumpers to protect fixtures during remodels.  Prevented millions of dollars of waste

Manufacturer:  McCue Corp (manufacturer of store asset protection devices, e.g. bumpers for appliance corners.)

Problem: Stores were not installing protective devices.  $1.6 billion being spent for store remodels, but non-compliance caused stores to look bad in 90 days.

Sales Cycle Notes:  Large effort with Safeway

Solutions Notes: Tracked store orders for compliance, found preventive solution, personally visited 300 stores. 

Category:   Remodels, Fixtures (SH)

 

(65)  Time Study Determined that 65% - 70% of Manufacturer’s Sales Time is Spent on Promotions – Which Only Account for a Small Percent of Sales and Profits.  Study covered 10 sales executives.  Note that much of the promotion activity has to be matched on the Retailer's side, creating significant duplication of effort.  (JM)

 

(66)  Increased Market Share and Margin For Retailer's HBC Department by 2% on $400 million in Sales.  Accomplished through numerous programs and initiatives over the years.

Category:  HBC (BC)  

 

(66.1)  Outsourcing Cost Savings – Where to Look

Details  (DY MH) http://www.tomingraminc.com/OutsourcingCostSavingsWhereToLook.pdf

 

(67)  Outsourced Pharmacy Distribution Operation for Retailer, Resulting in Significant Improvement in Sales and Distribution

Category:  HBC (BC)  

 

(68)  On Shelf Availability improvement from 84% to 95%, Results in Sales Gain of $297 Million

Results: Dedicated Merchandising Team created and deployed - On Shelf Availability was measured at 84% and was improved to 95% in year 1 of the team’s implementation, netting over $297 million in incremental sales

Manufacturer:  Fortune 25 HBC/Food Manufacturer

Problem: Manufacturer was using syndicated merchandising services provided by a third party, who could not focus on specific opportunities provide adequate time in-store.  Dedicated merchandising team  provided the ability to train, motivate, focus, provide adequate in-store time.

Solutions Notes:  Action based In-Store procedures supported by technology ensured consistency in execution, and the basis for sustainable results over time

Category:  Grocery Products – Dry and Perishable  (WV)

 

(69)  Consolidated Two Field Sales Teams into Single Team,  Eliminated $5 Million in Redundant Costs, Increased Merchandising Productivity by 20%

Results: Consolidated two existing Field Sales Teams into a single team. Resulted in the reduction of non-selling time by 15%  and increased the number of stores visited by 5%.   Accomplished through a better store coverage model. 

Manufacturer:  US Division of Global Manufacturer

Problem:  Duplication of field sales people, inefficiency in territories / overlap, lack of criteria for store visits and priorities.

Solutions Notes:  Stores prioritized and criteria created for store visits (frequency, time and objectives.)  Also prioritized by geography and channel.  Resulted in more time spent “in store” and less “non-selling / drive time”.  Also added more total stores and higher priority stores.  Regional focus during the Sun Care season.

Category:  Multi Category – HBC/GM/Grocery/Perishable  (WV)

 

 

(70)  New Product Speed to Shelf Results in $12 Million Sales Gain

Results:  New Product Speed to shelf improved from an average of 85% on shelf in 12 weeks to 85% on shelf in 4 weeks, generating an incremental resulting in sales gain of $12 Million (10%).

Manufacturer:  Fortune 25 Foods Company

Problem: New Product introduction processes in place focused primarily on headquarter selling.   Communication problems between Account Teams, Customer Service and Merchandising  resulted in multiple execution failures.  Symptoms included items being stuck in Distribution Centers, not getting to the shelf quickly (in some instances until 8 weeks+ later.)

Solutions Notes:  Achieved through a “Situation Room” approach to New Item Intro process plus better  communication between account team / customer service / merchandising team through handhelds and systems.  Resulted in faster order placement / confirmation, item code validation and ordering by the merchandising team.  Sales gain calculated by reducing speed to shelf time from 12 weeks to 4 weeks (approx.)  This added another full month of sales to the Year 1 Sales Volume ($12 Million).

Category:  Near-HBC, Grocery (WV)

 

 

(71)  On Shelf Availability and Field Merchandising Disciplines Yield  Sales Gain of $400 Million+

Results:   Dedicated Retail Team achieved 98%+ On Shelf Availability for all SKUs and sustained over 2+ years.  Team developed ROI model for each Retailer to understand  Cost to Serve and Selling Opportunities.  Verified that each merchandising call ‘pays for itself’ in incremental sales. 

1.    Manufacturer:  US Division of International Pharmaceutical Company

Problem: Store execution was not achieving targets, On Shelf Availability levels were not improving. Third Party merchandising was not generating the ROI necessary to justify the cost.

Solutions Notes: A Dedicated Team model was developed and implemented, requiring a  completely new merchandising team.  Risk concerns were quickly put to rest in-store execution was improved and documented during the first 14 weeks. In-store execution increased every month.  After 24 months, the equivalent sales growth driven by the new team approached 6% of annual sales.

Category:  HBC Categories  (WV)

 

(72)  Broker Audit Saves $2.5 Million.  Savings Used to Fund Improved Merchandising, On Shelf Availability, etc.

Results:  Approx. 10% cost savings by paying only for actual services provided.   Resulted in $2.5 Million savings which was reinvested in more productive programs.

1.    Manufacturer:  U.S. CPG Company

Problem: Traditional broker merchandising payment plan was based on “fees for services actually provided.”   Controls were not in place to monitor third party merchandising staffing levels.  Monthly payments were made without requiring services to be provided that justified the payment.

Solutions Notes: A system of controls and measures were implemented and integrated with Sales Operations to provide more clarity on actual services provided.  Broker payments that were not justified were accumulated and later invested in more productive programs (see other success stories by this Associate.)

Category:  HBC and Food / Grocery Categories  (WV)

 

(73)  IT Business Projects Now Pay For Themselves In One Year

FDA Submission Time Reduced by 6 Months+

Submission Backlog Reduced from 80,000 Pages to 10,000 Pages and Sustained, Despite Doubling of Work Load

All Accomplished in a Few Months in U.S.

Results duplicated in U.K.

Results: 

  • IT Business Projects Now Produce 2x Previous ROI

  • Reduced clinical submission data collected by 30%, substantial reduction in analysis time

  • Improved quality of data submissions and reduced time needed to scrub and recheck data

  • Removed six months from the overall clinical submission cycle

  • Submission forms backlogg reduced from 80,000 pages to 10,000 pages in three months

  • Submission form backlogg maintained at 10,000 pages despite doubling of work load

  • Questions about clinical trial data and process reduced by 50% and cycle time reduced by 75% in three months in US

  • Results duplicated in United Kingdom

Problem: 

  • Goal:  Speed up back end of drug development cycle by reducing paperwork, data analysis and submission to FDA

  • Goal: Remove as much data and data collection process as possible from five clinical trial protocols

  • Previous attempts resulted in only modest gains

  • Submission documents passed "over the transom", resulting in large duplication of effort to rework

Solution Notes: 

  • 12 month ROI on IT projects initially resisted and considered impossible.  Employees adapted, developed new tools and accomplished the goal

  • Brought together clinical researchers, biometrics statisticians, data analysts, FDA requirements experts in working group for the first time

  • Joint creation of process maps by participants from different departments resulted in their understanding of areas outside of their own department. Helped  them identify with the needs of the whole system and whole company-not just their own part. Resulted in less defensive feelings and conduct regarding change to their own function. Helped them understand that achieving the stretch goal can only be done through collective effort

Manufacturer:  GlaxoSmithKline 

Category:  HBC  (RHSA)

Details:  http://www.tomingraminc.com/GlaxoSmithKlineSuccessRHSA.pdf

http://www.tomingraminc.com/GlaxoSmithKlineSuccessRHSA2.pdf

 

(74)  $50 Million Sales Gain in Year One, $50 Million More in Year Two Proves Markets Not Saturated, Higher Margins Possible

Sales Gains Extended to Europe, Latin America, Asia, Australia, India and South Africa

All Accomplished with Series of 100 Day Projects

Results: 

  • $50 million in incremental annual sales in year one

  • On track additional $50 million of incremental annual sales in year two

  • Proved that primary markets were not saturated.  Found ways to grow revenue even in mature markets

  • Specialty tape division secured a commitment for a $2 million sale

  • Secured letters of intent for two other large customers within 100 days

  • No significant cost for consultants or capital expenditure

  • Closed a sale in 50 days that was originally scheduled to take 12 to 15 months to close

  • Proved it was possible to close sales at substantially higher profit margin, challenged assumption that only commodity margins were possible

  • Doubled sales from key customer by integrating multiple suppliers

  • Doubled the yield of a mothballed machine by making a slight modification to the product produced

  • Sales increased in Europe, Latin America, Asia, Australia, India and South Africa through same 100 day process

  • Changed culture from "sales as only contact with customer" to broad contact with customer from all parts of the company

  • Improved relationship between sales force and rest of the company. The sales team developed a deeper appreciation of what it takes to get the job done for the customer across the entire company

Problem: 

  • Company was profitable, had grown less than 10 percent in past two years, even though growth was a management primary goal. 

  • Discovered that all growth efforts were focused on long-term (e.g. developing new technologies and new products which took 2 to 3 years)

Solution Notes: 

  • Three divisions, including 14 growth opportunity targets were identified.  The goal for all 14 teams was to generate at least a proposal to a qualified customer within 100 days.

  • Team members were required to keep their regular jobs going at the same time

  • The 60 employees who participated were wildly enthusiastic about the experience

  • Spent very little time and money on formal training. Accomplished training, skill development and culture change while producing the results

  • Required the projects push participants out of their comfort zones

  • As of 2003, 550 teams were at work involving more than 2300 employees

  • Tight deadlines motivated people to overcome obstacles, take some risks and get things done without going to management for help

  • Challenged the assumption that the only way to get significant new things done was to spend forever doing a long study. Replaced this idea with the primary approach of the small-scale, 100 day efforts producing real data, rather than theory and opinion

  • Senior management remained involved. One or more senior executives participated in nearly all of the 50 and 100 day project reviews all over the world

     

Manufacturer:  Avery Dennison

Category:  HBC, Specialty Paper Products  (RHSA)

Details:  http://www.tomingraminc.com/AveryDennisonSuccessRHSA.pdf

.

 

(75)  $300 Million Cost Savings Year 1, Another $300 Million Savings in Year 2 Lead to 10 Years of Effective Acquisitions and Improved Profits

Dramatic Improvements in Union Plants

$100 Million+ Sustainable Sale Gains

Proved that Commodity Cycle Could Be Broken

Dramatic Reduction In Capital Spending

Results: 

  • $300 million in sustainable cost reductions in 2002

  • Additional $300 million of improvement in 2003

  • 67% output increase from a non-competitive plant in 2003.  On target for additional 60 percent improvement in 2004. 

  • Union grievances stopped at troubled plant. (Previously there were a dozen+ outstanding grievances)

  • Consolidated independently run plants to a common operating process, while allowing for local autonomy.  Introduced a common approach to bringing acquisitions into the company for the first time

  • Overcame silo thinking:  E.g. purchasing helped the plant to define true cost and yield on primary raw materials

  • Overcame silo thinking:  E.g. consolidated the purchase of new plant equipment across multiple departments, resulting in a cost-justified project that neither department would've been able to afford on their own.

  • Shut down the operation of an entire production line and four machines. (This had been recommended for 15 years, but had never been acted on before)

  • 20% production improvement in certain plants instead of 2 to 4% improvements, which were best ever achieved previously

  • Workers kept production up for seven months after a key executive quit.  (Due to interference in his "turf")

  • Cost of these improvements was almost $0

  • 40% Sustained Improvement In 10+ Plants:  In ten years preceding the effort, most of company's plants improved profits an average of 2.5% per year.  (Excluding improvements from capital expenditures.)  The plants that went through the improvement process generally improved 5.5% the first year and sustained 3.5% annual improvements thereafter - a 40% sustained improvement in 10+ plants

  • 25% improvement in production line up-time in just a few weeks.  Uptime of expensive production lines improved from 49% to 62%.

  • Significant progress on overall goal to turn a commodity business into a profitable business

  • $100 million in sustainable sales increases and cost reductions through 10 week projects (retail tissues and Dixie cups)

  • Attitude on capital spending has changed. When improvement is needed,instead of thinking about new capital investment, company gets better results from the  existing investment through 100 day improvement projects

  • Sustained improvement from 55% plant utilization to 70%. Lower results no longer tolerated

Problem: 

  • Company was assembled mostly through acquisitions. Difficult to integrate so many dissimilar plants, people and cultures. 

  • Uncompetitive plant

  • Corrosive union relationships

  • After five years, significant progress was being made but could've been better: (1) During the second wave, plant leadership became so focused on improvement that day-to-day performance suffered. (2) The staff specialists running the efforts became too focused on the process and were losing sight of results. (3)  Cooperation between plants was not taking place as desired

Solution Notes: 

  • Tested concept of rapid cycle projects in four  plants in 1995

  • Diagnostic team members were removed from their day-to-day responsibilities for the 10 weeks of the diagnostic

  • Highly structured process was designed, which could be replicated at multiple plants. Included all in the kickoff meeting, with razor-sharp goals, work plans and demands for achieving goals within six weeks.

  • Reviews were conducted at the six-week point to see if workplan had been implemented, goals reached and improvements were sustainable. Final reviews were presented at 10 weeks, with one team member assuming ongoing responsibility for tracking results. Process advances in each plant as a series of 10 week waves, consisting of 8 to 15 projects per wave.

  • Production workers were included in the diagnostic team, as well as corporate specialists.

  • Additional Solutions after 5 Years: Initiated hard audits of clear, sustainable savings to make sure that focus remained on actual, verifiable, sustainable results. Rebalanced workloads to help reduce loss of day-to-day performance during the improvement efforts.

  • 20% reduction in machine setup time in less than 10 weeks

  • Sustained improvement in machine cleanliness and reduced product contamination

  • Scope of improvements after 10 years is now so great that reviews span two or three days and are webcast throughout the company

  • Some keys include thorough diagnosis of opportunities, but unsatisfied with mere diagnosis. Demand for action and rapid results. Formalized 10 week process, including diagnosis, rapid results projects and sustainability planning. Broad involvement with people across the company and departments and levels, significantly improved cooperation and sharing between plants and senior executives. Performance information is shared across the entire company, which encourages constant improvement

Manufacturer:  Georgia-Pacific Consumer Products

Category:  HBC, Specialty Paper  (RHSA)

Details:  http://www.tomingraminc.com/GeorgiaPacificConsumerSuccessRHSA.pdf

 

 

(76)  $400 Million Profit Improvement Through Series of 100 Day Projects

Effective Merger Under Difficult Circumstances

10% Sales Gain With Top 30 Customers in a Few Months

Results: 

  • $400 million in incremental profits (On track to actually achieve as of this writing)

  • Reduced machine downtime for maintenance from two weeks to one week

  • $285,000 in annual savings within 100 days through consolidated purchasing and contract renegotiation

  • 10% sales growth in top 30 customers within just a few months

  • Consolidated two data centers into one within four months.

  • Closed $4 million incremental sale supplying packaging products to Unilever over 18 months

  • Completed full merger integration planning within 12 weeks. Enabling implementation to start immediately after close of the merger

Problem: 

  • In a merger of equals (the most difficult integration problem), set the goal of producing $325 million incremental profit within 24 months

  • When it became apparent that the planned sales goals were not going to be achieved, initiated teams to pursue specific opportunities at the top 30 customers

Solution Notes: 

  • Identified 25 major opportunities to reduce costs and increase productivity

  • A key was using respected operating people as the staff organization supporting these efforts

Manufacturer:  Mead, MeadWestvaco

Category:  HBC, Specialty Paper  (RHSA)

Details:  http://www.tomingraminc.com/MeadWestvacoSuccessRHSA.pdf

 

(77)  Reduced Quality Assurance Audit Time by over 30% within 100 days. 

Duplicated Common System in Three Major Acquisitions

Results: 

  • Reduced quality assurance audit time by over 30% within 100 days.

  • In the following two years, successfully integrated the clinical quality assurance functions of three additional major acquisitions.

Problem: 

  • Integration of R&D facilities (two major locations in Europe and three in the U.S.)

  • Each had their own unique work processes and systems. Goal was to consolidate to a single, common process

Solution Notes: 

  • Initial project was to improve quality assurance audits of clinical trials. Goal was a common and improved global process, including tools, materials, management team approval, train all staff in new processes, and accomplish all this within 100 days.

Manufacturer:  Johnson & Johnson

Category:  HBC  (RHSA)

Details:  http://www.tomingraminc.com/JohnsonandJohnsonSuccessRHSA.pdf

 

 

(78)  Supplier Helps Colgate Become #1 in Toothpaste Market Share

Manufacturing Capacity Doubled in Four Months

$2 Million Cost Savings in Shipping, Delivery Time Reduced

Results: 

  • Developed a proprietary ingredient that helped Colgate become US market share leader in toothpaste.

  • Increased manufacturing capacity 50% within four months to meet increased demand for new ingredient.

  • Reduced delivery costs by producing a concentrated form of the product, saving $2 million plus in shipping and receiving costs

  • Reduced delivery lead times

  • Reduced costs of production procedure changes and product specification changes

Manufacturer:  ISP (International Specialty Products)  A supplier of specialty chemicals to Unilever, Colgate, Procter & Gamble, etc.

Category:  HBC  (RHSA)

Details:  http://www.tomingraminc.com/ISPSuccessRHSA.pdf

 

 

(79)  $2 Million+ Savings in 60 Days on Product Damage in Shipping

Secured Regular Orders from Major Customers, Resulting in Regular Manufacturing Schedule In Just a Few Months

Big Improvement in Delivery Times and Collections in Just a Few Months

Major Reduction in Product Damage During Shipping

20% Reduction in Cost of Order Processing in Just a Few Months

Expanded program with similar results to dozens of additional customers and additional divisions

Results: 

  • Regular orders from major customers, regular manufacturing schedule and relatively few exceptions

  • Dramatically reduced delivery times

  • Significantly sped up collections in just a few months

  • In one year process for improved ordering, delivery and collections expanded to dozens of customers with similar results

  • 20% reduction in cost of order entry and 20% improvement in accuracy / speed of order entry within six months

  • Dramatically reduced product damage during shipping

  • Reduced packaging cost at same time as reduced damage during shipping