A Delicate Balance: Sales Growth and Production
"Much like the Chinese concept of yin and yang, the sales and production departments must exist side by side, harmoniously."
One of the constant challenges we all face in our shops is finding the proper balance between sales and production. Strategically, you want to continue to grow in the marketplace, of course, so you’re constantly searching for new ways to increase sales. But if the result is your production team being unable to keep up with the sales department’s efforts, this approach can be dangerous. Your company will be focusing too heavily on sales and miss on the production side, disappointing clients.
On the other hand, if you concentrate too heavily on production, ignoring sales, you’ll likely never garner the business you want and need in your shop in the first place.
What you want is an effective balance between the two, so that sales and production are more evenly matched. Much like the Chinese concept of yin and yang, the sales and production departments must exist side by side, harmoniously. Yes, it can be a tricky challenge – but if you choose to ignore this delicate balance, your company will undoubtedly lose business. If you continually work on the right balance, however, your business can reap long-term rewards.
Challenges on both sides
First, let’s analyze your sales staff. In past columns, I’ve noted that cash is the lifeblood of your business. But if we agree that our ability to keep sales flowing through a business is the way we create cash, then we can also agree that you need to constantly focus on maintaining current sales and securing new sales. Your sales team is, of course, very critical to that process. Your sales reps should always be driving toward the next sale. They should be doing everything in their power to land the next sale, and rightly so. At our shop, this is why we compensate our sales reps with commissions based on sales.
But this constant drive for additional sales is also why it will always be a challenge for management to ensure that the sales team considers the production side of the equation, not just the sales.
On the other side of the business, your production staff’s mentality obviously comes from a different direction than sales. Your production team’s priorities include getting the jobs done accurately, efficiently, and on-time for your customers.
Now, they will probably argue that placing too much sales pressure on production will prevent them from achieving those goals. They don’t necessarily consider themselves to be the enemy of the sales team – clearly they know that without sales they wouldn’t have a job. But, often, you find animosity among the production staff when they perceive that there is no control or standards by which the sales staff is being held. And if you aren’t careful, your production staff can cultivate an attitude that all they’re doing is working like crazy to make the sales team a lot of money. Morale can quickly become toxic. The challenge is to make sure each person on your production team knows that they’re working to create success for the entire business, not just your sales reps.
Establishing a system
In order to create a successful business model, you must have both your sales team and your production team working together. But this can only happen if a system of good communication is set up.
On the sales side, you must help them understand that there will be some constraints on the production side that they must work with. If your sales staff ignores those constraints, production will inevitably miss customer deadlines and the result is potentially loss of business.
In my experience, when sales reps have no formal communication systems or procedures set up to inform them of turn times, status of the shop, machine problems, inventory issues, etc., they’ll tend to overpromise to your customers and let production worry about how to get it produced.
If, however, you develop a system that communicates timely information to your sales team informing them of what you can and what you cannot do in any given day or week, your sales team will do a much better job working with your customers to agreed-upon deadlines that will work for them and that the production team can achieve. For example, our company sends out a “ticker” every morning and every afternoon to the sales team outlining the standard turn times on each machine we operate. The sales reps can comfortably assume that a normal-sized job can be delivered in the time frame indicated on the ticker. Big jobs always need to be quoted on turn times. This frees up our sales staff to communicate immediately to the customer when their job can be shipped. The system doesn’t have to be sophisticated – any communication is better than keeping your sales reps guessing.
But be careful not to place all the responsibilities on the sales team. Your production team needs to develop a “can-do” attitude for this to work. If you allow your production team to create buffers of comfort when establishing timelines, you will inevitably extend customer deadlines out too far on a consistent basis, and you’ll ultimately lose business. Face it: We operate in a world where customers demand quick turn times on a regular basis. If your shop develops a reputation of being great on quality and even price, but very slow on turnaround times, that may very well end up being your epitaph. It’s critical that your production team works its hardest to achieve customer demands.
Profitability as a goal
When there’s an improper balance between sales and production, typically sales blames production and vice versa. Frankly, neither is to blame. This is management’s fault. While proper communication systems are important, the only way to achieve true balance among all your employees is to make sure everyone is working toward the same overall goal.
And that goal must be profitability. If your company’s goal is only sales growth, then that will probably run counter to what production’s responsibilities are. On the other hand, if your overall company goals are oriented around rework, cost of sales, production efficiencies, etc., then it lowers the incentive to sell.
I’m not saying that you shouldn’t have sales and production goals as metrics to manage. My point is that the overriding goal that drives your corporate strategy – including every employee in the company – needs to be all about profitability. If you can manage to get both sales and production to focus on selling and producing profitable sales, you have won the biggest part of the battle.
Marty McGhie is VP finance/operations of Ferrari Color, a digital-imaging center with Salt Lake City, San Francisco, and Sacramento locations. The company offers high-quanlity large- and grand-format photo, inkjet, fabric, and UV printing. firstname.lastname@example.org