Lean thinking has defined seven wastes. As any process delivers both value and waste, one has to understand what is value and what is waste. We’ve defined “seven wastes in Sales” based on Lean’s original seven wastes.
- Re-learning is defined as moving sales opportunities between different units or people across the process in unstructured fashion. Different individuals need to re-learn information already known by somebody else in the organisation. This is wasteful as it does not add value to the customer.
- Partially done work is defined as work in progress (or inventory). This constitutes of work that has been started but not yet completed. In Sales some examples of this are sales opportunities that sales organization works on but have not yet been closed either as won or lost. The amount of partially done work is relative to the capacity of the sales organization to process sales opportunities. Sales organizations have a tendency to engage with all opportunities they identify and “bite more they can chew” in the process. This becomes a problem if the amount of active sales opportunities exceeds the capacity of the sales organization and does not deliver predictable results. If sales organization does not have enough capacity to process all sales opportunities they start to engage with they end up with unnecessary amount of partially done work (or inventory). No value add to customers.
- Handoffs are defined moving sales opportunities around in the organization. Handoffs between units performing the work causes disruptions in the workflow or process. Handoffs also increase quality issues and defects in the output. Examples of this is changing technical support experts working on one single sales opportunity. Handoffs cause often also other types of waste.
- Delays are defined as unplanned changes in the customers decision making schedule. Waiting is not a waste but un-forecasted waiting is a delay that causes issues in other parts of the organization such as production, planning or purchases. Unforeseen delays are waste.
- Degree of customization is defined as unnecessarily high degree of customer specific customizations to the offering or product being sold. Customers often see their needs as unique and therefore they push sales people to accommodate. If the sales person is unable to justify and convince the customer on the value of standard offerings the provider might end up making unnecessary amount of customer specific customizations. The cost of such customisations is noticed in production, manufacturing, procurement and quality. Degree of customization creates other types of waste.
- Over production is the most harmful of all wastes. It combines different types of wastes. If the desired outcome is not clearly understood, over production happens as people try to accomplish unclear goal. This is typical in solution design phase of the sales process. If the changes between different roles in the process are not clearly defined, over production happens.
- Defects are useless outputs of the sales process. All solution designs and proposals that do not add value to the customer. Proposed solution not meeting the needs of the customer or price does not fit the budget. Defects are waste as they either need significant re-work or yield no sales or value add to customer. Defects are typically cost by more then one other forms of waste.
- The eight waste is unused mental capacity of your employees. This is not part of original seven wastes in Lean, but it is generally quite well accepted as “the eight waste”. One is creating waste if employees in your organisations are not part of the continuous improvement efforts. To reduce “the eight waste” one should find ways to engage everyone in the organisation to identify improvement opportunities, propose solutions and contribute to organisations improvement efforts. These improvements may be big or small and there is some value in all of the identified issues and proposed solutions. The second category of sense of involvement. Employee satisfaction and customer satisfaction are highly correlated. Employee satisfaction goes up when personnel feels they are being heard and there is a formal channel through which they can engage and influence how the company operates.