RTM Operations

No post yesterday, the consultant Beatris Huber discussed how the implementation of a strategy of Routes-To-Market (RTM) can provide significant competitive advantage for consumer goods companies, presenting general guidelines for the definition of efficient and effective “routes”.

In addition to the tactical and strategic levels, it is necessary to look carefully at the RTM operation, whose costs related to sales and merchandising, in some cases, are even greater than the distribution costs. By RTM operation, one can understand the definition of service routes for each customer profile and the subsequent management of the sales operation, shelf replacement and communication at the POS within this “route”.

For example, a “route” could be formed by small customers in urban centers, a second “route” formed by large customers, a third “route” could be defined geographically to serve customers in a specific region in the interior of the state, and so on.

Each “route” requires specific resources (seller profile, having or not stockers, type of vehicle, material and means of communication, among others), according to operational characteristics, such as distance between customers and possible time restrictions, and service definitions, such as frequency of visits and communication channel.

There are, however, enormous challenges for productivity management in each “route”. Differently from the merchandise distribution operation, the productivity parameters of sales “routes” are much more difficult to establish. In the distribution of products, almost always, the greater the number of deliveries per vehicle, the greater its occupancy rate and the shorter the delivery time, the more efficient the operation. In the case of the sales “route”, the more visits a salesperson is able to make, the better it is for the sales volume/mix? Which is better: spending more or less time per visit on each customer? What is the optimum time? Is it the same for all sellers?

In addition to this difficulty in establishing productivity parameters, most companies hire their sales teams without working hours control, a practice that is a legacy of a period when mechanisms for controlling the hours of external teams were incipient, which would protect the company of paying overtime.

Currently, with the technology embedded in any smartphone, it is possible to control in detail the steps of the sales team, asking the following question: is it better to control the journey of the sales team, establishing productivity metrics, and bear possible overtime or avoid control of the journey, and believe that the goal Is commercial activity enough to stimulate productivity, and not have costs with overtime (perhaps with some lawsuits in the Labor Court)?

Many questions posed here do not have definitive answers, but there is certainly a lot of room in the management of RTM operations for productivity gains. Finding the balance of factors that lead to sales optimization, considering volume, profitability, mix and geographic penetration is a huge challenge that needs to be faced with the use of sophisticated techniques, especially by consumer goods companies with a high degree of fragmentation in sales. .