Less Is More - Applying the Flow Concepts to Sales (Chapter 21 of the Theory of Constraints Handbook)Mauricio Herman and Rami Goldratt
Level of TOC knowledge acquired:Advanced and Intermediate
Designed for:Business owners, Consultants, Implementers and Leaders
Topics:Ever-flourishing, Ongoing Improvement and Sales
Application:Five Focusing Steps and Thinking Processes
This is an individual chapter of Theory of Constraints Handbook. This chapter presents a case study of the implementation of Eli Goldratt's flow concepts to the management of the sales funnel in an organization.
The concepts briefly stated are: regard flow as a prime measurement, choke the release of incoming sales opportunities; abolish local efficiencies; and identify and eliminate disruptions to the flow of sales opportunities. While Goldratt discussed these flow concepts with respect to increasing reliability and speed significantly in a production environment, this case describes the application of these flow concepts to the management of the sales process.
After the implementation, the sales hit rate increased from 11 to 40%; sales cycle duration shortened from an average of 32 to 17 days; and average throughput per order grew from 52 to 68 percent.
- Improving Flow
- Preventing Overproduction
- Local Efficiencies Must Be Abolished
- A Focusing Process Must Be in Place
Comprehensive coverage of the Theory of Constraints
Complete Table of contents of the Theory of Constraints Handbook
- I: What is TOC?
- II: Critical Chain Project Management
- III: DBR, Buffer Management, and Distribution
- IV: Performance Measures
- V: Strategy, Marketing, and Sales
- VI: Thinking Processes
- VII: TOC in Services
- VIII: TOC in Complex Environments
- Theory of Constraints in Complex Organizations
- Applications of Strategy and Tactics Trees in Organizations
- Complex Environments
- Combining Lean, Six Sigma, and the Theory of Constraints to Achieve Breakthrough Performance
- Using TOC in Complex Systems
- Theory of Constraints for Personal Productivity/Dilemmas
- IX: Summary
About the Authors:
James F. Cox III, Ph.D, CFPIM, CIRM, holds TOCICO certifications in all disciplines. He is a Jonah's Jonah, Professor Emeritus, and was the Robert O. Arnold Professor of Business in the Terry College of Business at the University of Georgia. Dr. Cox has written three books on TOC.
John Schleier holds TOCICO certifications in all disciplines. He was President and Chief Operating Officer of the Mortgage Services Division of Alltel, Inc., Executive Vice President of Computer Power, Inc., and Director of Office Systems and Data Delivery for IBM.