Conflict between Sales and SCM (Supply Chain Management)

A conflict between Sales and SCM (Supply Chain Management) is so common that almost every sales and SCM person can correlate themselves with this issue. While Salespersons use to complain about (much) delayed delivery time which make their commitments fail, SCM staff quotes over-commitment of Salespersons.  What is the real (possible) story behind this? We are taking an example which may explain it better.

After hard follow-up since 3 months, a salesman got a golden opportunity to have a personalised meeting with procurement head of client. Usually, such personalised meeting lasts for 4-6 Hours in evening time at the client’s office. The discussion about the order (and offer submitted) happens only in last 30 minutes and rest of the time the discussion use to be in a Global mode where the topic can be anything including Trump and Putin. For a salesperson, it is a big opportunity.

So after all discussion, the Procurement Head asked for a final discount which might be fitting in pre-approved price for the salesperson or the salesperson takes a call on basis of past experience. The focus was to close the deal at that very moment. The watch was suggesting it to be almost a mid-night so the Sales guy could not call product marketing or SCM. There might be some addition of material in last moment or change in specification of a particular item and if both were good then restricted timeframe was raised for delivery citing urgency.  That moment was a red-hot moment and a sales guy can’t afford to lose the opportunity to close the order. They try to convince the client but end-up with a “yes” and ensures Purchase Order.

Now the war begins. The salesperson needs material in given timeframe and SCM has its own limitation. Hundreds of emails get floated. But all this end up with a failure of commitment. Salesperson totally blames it on SCM and quoting few previous cases when the similar material was delivered at a faster pace. SCM blame it on Salesperson for making commitments without having a confirmation. This creates gap between SCM and Sales and results in an angry client who has no idea that when the material will reach. And finally, the company loses a valuable client after (only) one business.

Who is the culprit in this case?

To understand this we need to answer that which statement is correct.

Statement 1: The salesperson was not supposed to close the order that day and could have taken a prior approval with SCM to commit to the Client. Also if the suggested delivery time wasn’t as per client’s expectation then Salesperson should lose the order.

Statement 2: Winning the order was a most important thing, so it is good that the salesperson closed the order. SCM need to understand the criticalness of the case and could have shown extra efforts to complete the order on time.

Statement 3: While closing the order the Salesperson need to be more diplomatic and not to be in much hurry. The Sales guy should commit to a try but the final delivery date to be conveyed on next date after checking with stock and SCM. Even if the suggested delivery date is not in line with the expectation of client, the communication should never be lost. It is observed that clients get angry mostly when they don’t get a response or a clear response, else the situation is manageable. Meanwhile, the SCM guy should also appreciate the effort of Salesperson and understand that company needs order. They should put their full effort to make it possible on time. Showing team spirit and making a clear communication chain will retain the customer.

If you think Statement 1 is correct then the salesperson stands guilty and for Statement 2 it is the SCM guy. But in both the cases Company is losing. The company where both are employed, should be put on first priority.

Now Statement 3 describes a solution which exactly not happened. Managing Customer is an art for a salesperson and managing the internal team is an art for SCM guy. Both need to win and respect each other’s constraint. SCM persons have many constraints which are majorly depending on manufacturing and imports. And at the same time, it takes many efforts to convert an enquiry into the order. So fi both are respecting each other’s effort then things will be resolved easily. Losing a customer is bad for both and not only for a salesperson.

Conclusion

Most of the tussles are either because of “Ego” or “miscommunication”. The issue of delivery is a common thing in many companies, you just need to minimise with proper coordination. The client will not stop doing business with you just because you could not deliver on time but because you did not communicate it on time.

Post Author: SimplyVedant

1 thought on “Conflict between Sales and SCM (Supply Chain Management)

    Senthil Kumar

    (December 11, 2017 - 4:04 pm)

    Great

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