The company is located in the Valencian Community and has been operating for more than fifty years. It produces and packages a food product that it distributes through the usual channels such as large distribution and supermarkets. The turnover volume is over thirteen million euros per year.
At the time the company raises the problem that worries us, which we could synthesize in that in certain brands at the national level they are losing sales volume and profitability is reducing, the latter aspect due to an increase in logistics cost as a result of decreasing orders and an increase in promotional expenses that are required of it and that, however, these promotions do not obtain the expected results. At those times the company suffers from point of sale management.
We proceeded to select the staff who would perform the role of Point of Sale Manager, valuing above all the experience they could bring in this regard since they should learn and adopt the Point of Sale Management methodology that we had developed. Obviously, the ultimate objective of this is none other than to optimize sales at the point of sale. To do this, considering both the management of the lines established by each brand as well as the behavior of the consumer in front of them, we structured a methodology that considers five key aspects:
1. Product exhibition
2. Stock control
3. Order management
4. Relationship with the section manager
5. Competence
6. Tools, Implementation and Results
Product display
Different variables are controlled that allow evaluating the "quality" of the product's exposure:
· Presence (sometimes there are referenced products that are not present).
· Labeling (provides adequate identification).
· Price
· Promotion
· PLV
· Facings
· Temperature (index that measures the “hot spot” in which the product is located in relation to the “hottest spot” on the shelf.
Knowing the values of these variables at each point of sale will tell us what kind of steps we should undertake to improve product exposure.
Stock control
Out of stock occurs more frequently than desired at the point of sale due to various causes. Be that as it may, the fact is that for some days the point of sale does not have our product available for consumers, so the corresponding sales are lost. It is estimated that the volume of sales that are lost due to this concept in large distribution can range between 10 and 15%. The really effective thing would be to have the stock and sales datain each point of sale in order to properly schedule the supply ensuring product availability. But this is not possible. However, it is necessary to have "some" information (better than nothing) that allows us to at least establish certain parameters. In our methodology, we specifically measure:
· Order launch point of each point of sale (established in the system of the brand itself), this being information that we obtain with the collaboration of the section manager.
· Coverage of the demand expressed in days of the existing stock at the point of sale, which allows, for example, to foresee short-term stock breakages as well as to have an indication of the demand at said point of sale.
Provisioning time
With all these variables, what we create is a simulation model (with a BI tool) that informs us how sales are produced at the point of sale and therefore what product needs they are going to have, thereby reducing the minimum possible stock out of stock.
According to each brand, the order is made by the point of sale itself or by a logistics platform. It is common that, for various reasons, the points of sale receive their orders incomplete or have to wait for the established supply day, enduring a stock break. What our methodology establishes is:
· Take the product needs at each point of sale as an order proposal.
· Add all the order proposals from those points of sale that are supplied by the same logistics platform.
· Try to manage with the logistics platform the order proposals added in a coordinated manner together with the points of sale.
In this way, it is intended that the supply of our product to the points of sale is necessary to meet all the demand that is generated both in quantity and in time.
Relationship with the section chief
In order to manage the point of sale correctly and to be able to apply the methodology, it is necessary to have the collaboration of the section manager. That is why we try to somehow measure the relationship with him based on the subjective evaluation that we ask him to make, on a scale of 1 to 5, of sales, complaints and service.
Competition
We monitor the products of companies that are directly competitors, using the same variables with which we control our own product.
The GPVs, in addition to having been trained in this methodology, have been equipped with a mobile terminal which, in addition to containing their daily agenda with the routes of points of sale they must visit, records all the required information in a form. This information is stored in a repository hosted on a server.
Tools, Implementation and Results
To monitor and control commercial activity, as well as the situation of each point of sale, an application with a BI tool has been developed. This allows you to display and analyze all the data from any perspective you want (by product, point of sale, brand, GPV, area, etc.). But it also makes it possible to identify points for improvement and establish lines of action. On the other hand, there have been some management indicators that allow to evaluate the efficient performance of the management, both at a given moment and to check what has been its evolution:
· Attention to the point of sale
· Level of contact
· Product positioning · Product
introduction rate
· Stock management (breakages)
· Orders
· Complaints
· Relationship (with section managers)
· You have a clear “photo” of what happens at each point of sale.
· Identify lines of action to be followed at each point of sale.
· Has redefined its strategy in a more concrete way.
· Has managed to locate and remedy causes of stock outs.
· You have information about the competition.
· It has a procedure to guarantee the correct functioning of the promotions.
· Maintains a regular relationship with section leaders.
Of all these results, although they are evident in the company as there is no previously recorded data, it is not possible to measure them. But what if there is data is the volume of sales, and this is evolving favorably so that the projection at the end of the year shows a year-on-year increase close to 20%.
