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3M ASD Process/Results 8/9 April 1999

3M ASD Process/Results 8/9 April 1999. ASD Surface Conditioning has 52 reps in 14 sales branches in the US. Annual sales +/- $100MM. No salesforce ad’ns in last 5 yrs. Q? How large should the direct sales force be? Q? How should it be allocated to branches?. Process.

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3M ASD Process/Results 8/9 April 1999

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  1. 3M ASD Process/Results 8/9 April 1999 • ASD Surface Conditioning has 52 reps in 14 sales branches in the US. Annual sales +/- $100MM. No salesforce ad’ns in last 5 yrs. • Q? How large should the direct sales force be? • Q? How should it be allocated to branches?

  2. Process • 1 1/2 hour presentation, 8 April • 2 hour calibration session: 3-4 mgrs/group; 3-4 sales branches/group. (2 rounds) • Review of median responses • GLL & JFL prepare analysis overnight • Report, comment and plan next steps 9 April

  3. Approach Each management team member separately estimatesa response function for each sales entry As a group, the management team members discuss and develop consensus estimates of response functions Run the model Test profit consequences of alternate scenarios Do results make sense? What ‘s next for 3M ASD? No Yes

  4. Base Case Allocation

  5. Base Case Sensitivity

  6. Effects of Margin

  7. Reallocation Chart

  8. Key Points • Base Case • 52 to 84 Reps (+32) • Net Profit (+11%) • Key gains: Dallas, Nashville, Seattle • Reallocation Case • Net Profit (+4%) • Losers: LA, Chicago • Winners: Nashville, HP, Dallas, Seattle

  9. Other Analyses • Decrease Dallas, HP, Nash, Seattle to avg response==> still 84 reps • Results esp sensitive to assumptions about LA, particularly looking at reallocation.

  10. Next Steps • Refine plan to add about 20 reps, primarily in targeted branches • Repeat analysis within next two weeks for coated abrasives (about 100 reps) • Propose salesforce growth plan to management on 7 May.

  11. What Did 3M Do? • Repeated analysis for related sales force (125 reps), 2 weeks later ==> related sales force too large! • (Note: 3M staff did the data gathering and analysis with minimal coaching!) • 2. Result: reorganized sales force to align resources with opportunities.

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