Click to read the original text for details. Recently, many distributors have asked: "My trading company has over 50 employees and sales in the tens of millions, but I always feel that efficiency is low and costs are high. How can we achieve fine management?" Today, we have invited Mr. Cao Qingbing, founding partner of Nanjing Zhuo'er Consulting, to share his understanding and methods on this topic, hoping it will be helpful to everyone. First, fine management is urgent for large trading companies, but it is also imperative for small and medium-sized ones. We must correctly understand fine management: it is not about managing to the extreme, but about efficient operation of company resources, reasonable expenditure, and fostering a competitive and cooperative atmosphere among teams. To achieve fine management, we need to know which issues must be resolved: 1. We need to know the output ratio of each salesperson. From the second month a salesperson joins the company, we should calculate their output ratio and turn it into data for comparison, to see how new and veteran employees perform at the same tenure. By calculating this ratio, we can effectively identify which employees need focused attention. Some employees often complain about salary; you just need to look at their output to decide whether to keep them or let them go. 2. We need to know the output of each sales outlet. Trading companies sell products through sales outlets, which can be considered fixed assets. We must keep track of each outlet's purchase volume, replenishment volume, and shipment volume (financial software makes this easy; if you don't have software, you can use spreadsheets, though it's more laborious). This way, we clearly know where to allocate materials, resources, and activities to maximize output. 3. We need to calculate the optimal warehouse area and cubic capacity. A larger warehouse is not necessarily better, since you rent it (or if you bought it and don't use it, you can rent it out to earn money). Calculate the area per product, plan warehouse zoning and stacking reasonably, so that each area is maximized without hindering picking. This also helps with instant inventory counting, significantly improving warehouse utilization. 4. We need to calculate the minimum delivery standard and costs. Delivery is a crucial part of trading and one of the most wasteful cost areas. We must plan routes scientifically based on product shipment volumes. Options include van sales, pre-order visits, or distribution. But all depend on our calculated minimum delivery standard, delivery cost per item, fuel cost per kilometer, and personnel wages. Based on this data, we decide whether to use van sales, pre-order visits, or distribution to minimize delivery costs. 5. We need to calculate minimum inventory levels for different seasons. Some manufacturers like to pressure distributors to stock up (be cautious with manufacturers that particularly like to push inventory; it's best not to take on such products). However, distributors themselves must know the reasonable inventory level for each product in different seasons. If fluctuations are small, coordinating with manufacturer shipments is fine. If inventory pressure is too high, beware of capital chain breaks. Many trading companies have collapsed due to capital chain issues in recent years. Only by calculating reasonable inventory levels can we optimize inventory costs. 6. We need to understand the efficiency of company capital usage. Money is the root of all evil, but for trading companies, cash is paramount. I suggest that no matter how big the boss or the company, either the boss understands finance (if not, learn) or hire professional financial personnel. We must plan financial data reasonably, clearly understand the company's reasonable cash flow, and maximize capital usage. In today's era, making money is important, but knowing how to spend money wisely is even more important. 7. We need to know the average number of outlets served per salesperson. It's not that the more outlets a salesperson serves, the better, nor the fewer. Based on my years of experience serving FMCG manufacturers and trading companies, the number of outlets per salesperson generally falls into three stages: no more than 150 in the early market stage, no more than 300 in the mid-stage, and no more than 500 in the mature stage. Also, it should not be less than 120, otherwise the salesperson cannot be sustained. 8. We need detailed outlet archive management forms. The importance of outlet archives cannot be overstated. Trading companies must have detailed outlet archive management forms, and it's best to spend 30 minutes daily studying them. Many mature enterprises review these archives at morning meetings. 9. We need to design a scientific performance appraisal mechanism. Performance appraisal is often used by trading companies to deduct employee pay, leading salespeople to interpret performance as a deduction. In fact, for trading companies, the core of a scientific performance appraisal mechanism is to let employees get more for doing more, and the capable get more. Any performance mechanism that violates this principle is ineffective or even counterproductive. A scientific performance appraisal mechanism can boost salespeople's motivation and ensure the company's money is spent on effective employees. 10. We need to collect daily work data from salespeople. Without basic data, trading companies cannot achieve fine management; this is the source of everything. 11. We need to analyze monthly sales data. With basic data, we should conduct monthly sales data analysis, monthly financial data analysis, warehouse data analysis, delivery data analysis, etc. These analyses help us identify where the main costs are, who creates the main profits, which tasks generate costs, and which tasks create benefits. 12. We need to analyze annual sales data. Annual data analysis is a summary based on monthly data. Some problems cannot be seen from a single month's data, but when the timeline is extended to a year, they become clear. This enables our fine management to truly achieve summarization, induction, and improvement. In conclusion, for trading companies to achieve fine management, our bosses must require themselves to be good leaders, pay attention to data and processes, participate personally, study calmly, and keep learning. Source: Businessman (商业家)