Phase Nine is characterised by manipulating your sales and work mix to further increase productivity and revenue.

A Typical Phase Nine Business

Businesses starting Phase Nine usually have a sales team heavily focused on selling as much as it can, and typically have now got their internal lead times stable and under control. Sometimes the business is demand limited, rather than supply limited.

The jobs that are coming from the sales team are a mix of volumes and prices gained in a competitive environment, and they are putting a lot of downwards pressure on operational margins.

• Sometimes, the mix of jobs closed means we run at a loss, sometimes a profit, and our ability to predict end of month profitability is poor.
• It is common to see the forward order queue has a series of overloads and toughs in it (a castle crenellation shaped skew of demand over time).

Customers consider the differences between your business and your competitors to be negligible. All they want is the best price, and are happy to have your salespeople compete over price.

• It is common to hear that the sales team have offered discounts to win a big contract, only to then find it was not a good job for operations.
• Sometimes, clients cancel jobs leaving holes in your constraint schedule, and you have to discount heavily to fill them.

The Transition Journey From Phase Eight

You will start by transitioning your sales team from 'sell as much as you can' to 'selling throughput velocity' and 'selling to fill the holes in the forward demand skew.'

Increasingly sales and operations will cooperate to sell the right job into the right schedule. There will be a transition period where the sales team gets to know what your operational buffer boards represent, and that they are no longer selling to a fixed lead time. Total throughput will replace total sales as the key sales performance measure.

Salespeople will increasingly hunt for jobs that sustain or improve the total throughput delivered by operations. You will start designing improvements to and altering sales guidelines to target regular reliable purchases that cover your fixed OE, and higher throughput velocity jobs that drive up your profit. You will start developing products that salespeople can sell in advance and then deploy as capacity hole-fillers, exploiting our periodically underloaded capacity.

The Benefits of Completing Phase Nine

In Phase Nine, you will understand the type and volume of work that maximises your profit given your nominated constraint.

You’ll notice that salespeople are using their knowledge of “throughput dollar velocity” to steer the sales mix towards faster money, high throughput jobs, and combinations of jobs that profitably fill available capacity.

• Salespeople are using the visual boards to tune their sales priorities.
• Salespeople will be deploying capacity-gap filling tactics to increase and protect daily throughput.
• Salespeople will be deploying sales offers that your competitors choose not to mimic, yet these offers differentiate you in the market allowing you to ‘bank' more throughput.

There will have been an increase in throughput generated by the business and this increase will have stabilised and become reliable. Your overall margins will have increased with a corresponding jump in your cash flow. Your regular repeat business will put you into profit every month; It is actually hard to make a loss!

Lower margin jobs that only require resources with free capacity, or require little constraint capacity, are moving freely through the system with little disruption.