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Refresh and renew your performance drive in 2007?

 

"Lies, damned lies and statistics"

may be the typical cynics' view of performance measurements in our industry. There certainly has been a marked reluctance in recent years, to contribute to information exchanges in the more developed US and UK markets of the Office Products Industry.

This has not always been the case and NOPA the old US trade association ran a very successful information service in the "Escalating Eighties" when high growth rates were the norm. The statistics gathered then were primarily focused on historic, financial results compiled by accountants. May be that's where the cynicism crept in?

Today, whilst historic results are crucial there is a crying need for current operating performance measures…measures which involve everyone in the business… employees, customers and suppliers  - not just the accountants and senior management.

 

REAL performance measures that people can understand, touch, feel motivated by and effect in their everyday performance. Especially, going into market conditions that promise to be stronger in 2007.

The proficiency index  was designed to measure  key performance indicators (KPI's) for office dealers and resellers around the world. The Six Dimensions of Office Dealer performance identified together with average current industry levels in 2006 for dealers with annual sales over $10m were as follows:

 

1.     Profitability - Return on Working Capital Employed % - 29%

2.     Productivity - Sales/Employee - $300,000; Best Practice $430,000

3.     Customer Service Index - Service Level % - 95%

4.     Customer Relationship Management - Retention Rate % - 82%

5.    Employee Relationship Management - Retention Rate % - 85%

6.     Marketability - Average Order Value - $138; Best Practice $278.

Definitions update - Click here

These headline KPI's -  were supported by detailed sub-measures to breakdown contributory factors/sections of work e.g. lines picked/warehouseman hour.

 

Traditionally, businesses focused simply on Profitability measures and the historic "five frontiers" i.e. sales growth, gross margins, operating costs, stock control and receivables control. These are still the crucial measures reflected in its #1 status.

 

The Proficiency Index introduced and emphasised the key drivers of sales and marketing performance, the reason why most resellers get up in the morning and the motivating force for their employees. Real performance criteria.

 

"What gets measured gets done!" is a frequently quoted phrase and practised by the leaders of our industry. It's no coincidence that Lyreco and Viking, for example, know and live by their numbers and the underlying reasons for good and bad performances.

 

Wherever they are in the world, office dealers and resellers, should understand that the fundamental measures are the same and they are urged to continue their participation  in the proficiency index.

 

The writer will email a simple KPI survey to dealers and resellers in the UK, Europe and the USA with Sales estimated above $10M in 2006. The confidential survey will attach explanatory notes for completion and return using January 2007 as the base reference period where relevant. The returns will be analysed and trends reported in this new and regular section of OPI.

 

Each month the focus will be on one of the six dimensions with comment on best practice as new benchmarks are established for our growing industry.


Start your high performance drive in 2007 !