Correlation between efficiency parameters and sales value targets

Name: Avishek Basu Mallick Project: Driving Stockist Salesman Efficiency in a Non-Metro Urban Town Project Mentor/Guide/Tutor: Hironmoy Sen/ Dhiman Bhattacharya/ Sayan Dev Banerjee Location: Jamshedpur

Estimated Sales Value Targets

Secondary Sales Value Target As given Efficiency of Coverage Target As given Billing Efficiency Target 20 outlets per visit Lines Per Bill Target 6 Focus Brand Target 3 per month

Note: Whole Sale Data has not been taken into account

Focus Brand Achievement

SSM Incentive Earned

Descriptive Statistics
Descriptive Statistics N Sales Achieved Sales Target SSM Incentive Eco Target Eco Achieved Billing Efficiency Lines Per Bill Focus Brand Achievement Sales Achievement % Eco % Valid N (listwise) 70 47 35 47 70 70 70 35 54 54 31 Minimum 3825.86 100000.00 .00 70.00 3.00 .12 2.33 .00 .03 .04 Maximum 1712662.48 1250000.00 2100.00 270.00 294.00 20.77 11.25 3.00 4.16 1.25 Mean 515992.7673 504474.7845 1175.7143 194.3617 133.9429 10.9664 5.6985 1.2571 1.1461 .6861 Std. Deviation 406551.45896 248384.36651 703.91462 24.12596 66.51901 5.82382 1.53073 .98048 .87069 .29529

Sales Report
Report Mean Sales Achievement SSM Dabloo Mukesh Kumar Raj Kumar Rajeev Ranjan Rohit Verma Sanjay Kumar Singh Sanjay Sahoo Santosh Kr. Sahoo Santosh Kumar Rajeev Ranjan SO Abhishek Pandey Krishna Sharma Santosh Agarwal Shiv Shankar Somnath Bose Rohit Bihari Gorakh Pandey Sanjay Verma Total 2.1274 1.1461 .4333 .6861 1.0263 .3364 .7720 1.8307 1.3692 .7421 .3773 .7028 1.0974 .9935 % 1.1978 2.1033 .8212 .9833 1.5785 .1515 .0349 .9899 .6294 Eco % .9750 .9895 .5737 .6767 .8021 .3942 .0842 .5171 .3028 Billing Efficiency 16.4444 13.7540 10.1830 13.2186 15.2077 3.2941 11.2782 10.2305 5.3285 3.9665 13.4455 6.9629 13.4363 12.5926 15.1362 1.7531 11.5556 5.9486 10.9664 Lines Per Bill 4.4955 5.5883 5.3050 4.4545 6.0914 5.3319 4.4229 5.7642 5.3393 5.2750 5.7144 4.0630 6.5648 5.7912 6.2526 8.3664 4.8558 8.5205 5.6985 .0000 1.2571 1000.0000 1175.7143 1.7500 .0000 1.6667 2.0000 1.8000 1212.5000 .0000 1683.3333 2100.0000 1540.0000 .3333 83.3333 Focus Brand Achievement .0000 1.7500 .6667 1.0000 2.0000 1.5000 SSM Incentive 1600.0000 1900.0000 983.3333 900.0000 1350.0000 375.0000 Sales Achieved 718709.5100 816811.8350 376537.7933 530834.5467 487080.4650 43423.3950 180080.5600 507614.8800 115667.7775 90783.9550 947011.0000 120208.5767 949970.2233 732278.2800 658311.6867 47428.9500 449527.5600 560264.8367 515992.7673 Eco Achieved 195.0000 167.6667 128.8333 134.6667 156.6667 83.5000 137.6667 98.2500 55.2500 39.0000 178.0000 131.3333 153.3333 214.0000 198.5000 42.5000 185.0000 82.3333 133.9429 313333.3333 504474.7845 190.0000 194.3617 400000.0000 528385.8117 195.0000 203.3333 910000.0000 204.2000 Sales Target 600000.0000 462000.0000 360000.0000 608333.3333 490000.0000 275000.0000 450000.0000 535000.0000 233333.3333 Eco Target 200.0000 195.4000 174.2000 196.8333 190.0000 212.5000 190.0000 190.0000 191.6667

Correlation Matrix
Correlation Matrix Sales Achievement % Correlation Sales Achievement % Eco % Billing Efficiency Lines Per Bill Focus Brand Achievement SSM Incentive Sales Achieved Eco Achieved Sales Target Eco Target 1.000 .181 .185 .463 -.069 .534 .610 .093 -.225 -.356 Eco % .181 1.000 .829 -.190 .420 .735 .393 .972 .429 .044 Billing Efficiency .185 .829 1.000 -.338 .334 .690 .529 .804 .494 .007 Lines Per Bill .463 -.190 -.338 1.000 -.220 .040 .221 -.266 -.183 -.381 Focus Brand Achievement -.069 .420 .334 -.220 1.000 .487 .217 .475 .417 .342 SSM Incentive .534 .735 .690 .040 .487 1.000 .697 .672 .322 -.140 Sales Achieved .610 .393 .529 .221 .217 .697 1.000 .307 .472 -.307 Eco Achieved .093 .972 .804 -.266 .475 .672 .307 1.000 .448 .273 Sales Target -.225 .429 .494 -.183 .417 .322 .472 .448 1.000 .090 Eco Target -.356 .044 .007 -.381 .342 -.140 -.307 .273 .090 1.000

Correlation Matrix
From the correlation matrix we can see that there is a high degree of correlation between certain parameters e.g. Sales Achievement % and Eco (Achieved) % have a correlation of 0.972 Therefore to avoid multicollinearity, we can reduce the number of parameters to two factors.

Total Variance
Total Variance Explained Initial Eigenvalues Component 1 2 3 4 5 6 7 8 9 10 Total 4.397 2.382 .941 .876 .561 .492 .137 .132 .082 .001 % of Variance 43.968 23.815 9.413 8.761 5.609 4.920 1.371 1.319 .817 .007 Cumulative % 43.968 67.783 77.196 85.957 91.566 96.486 97.857 99.176 99.993 100.000 Extraction Sums of Squared Loadings Total 4.397 2.382 % of Variance 43.968 23.815 Cumulative % 43.968 67.783 Rotation Sums of Squared Loadings Total 4.352 2.426 % of Variance 43.520 24.263 Cumulative % 43.520 67.783

Extraction Method: Principal Component Analysis.

Scree Plot

Correlation between the factors

Correlations

REGR factor score 1 for analysis 1 REGR factor score 1 for analysis 1 Pearson Correlation Sig. (2-tailed) N REGR factor score 2 for analysis 1 Pearson Correlation Sig. (2-tailed) N 31 .000 1.000 31 1

REGR factor score 2 for analysis 1 .000 1.000 31 1

31

Rotated Component Matrix

Rotated Component Matrixa Component 1 Eco Achieved .914 2 -.112

Eco %
Billing Efficiency SSM Incentive Sales Target Focus Brand Achievement Sales Achievement % Eco Target

.910
.888 .811 .627 .619 .167 .161

.051
.065 .441 -.155 -.250 .853 -.704

Lines Per Bill

Sales Achieved Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 3 iterations.

-.298
.567

.696
.647

Factor Analysis Results

The Scree Plot tells us that we can reduce the number of parameters to two factors The total variance data tells us that 67.783% of the data can be represented by two factors The correlation data tells us that there is zero correlation between the two factors Factor 1 focusses on Eco (Target and Achievement) and Billing Efficiency Factor 2 focusses on Sales Achievement and Lines Per Bill

Factor Analysis Report for SSM

Report Mean REGR factor score 1 for REGR factor score 2 for analysis 1 -.0545938 .5711888

SSM
Dabloo Mukesh Kumar

analysis 1 .5642911 .7239003

Raj Kumar
Rajeev Ranjan Rohit Verma Sanjay Kumar Singh Santosh Kumar Abhishek Pandey Shiv Shankar Somnath Bose Sanjay Verma Total

-.5481093
-.1202727 .8693506 -1.2097899 -1.5620407 .5526075 .8205348 .6840081 -1.2092392 .0000000

.0434922
-.2391345 .0001899 -1.1824730 -.4878199 -.3764095 .4611703 -.0180271 1.7792646 .0000000

Factor Analysis Report for SSM

Descriptive Statistics for KANO Model

Descriptive Statistics

N Sales Achievement % LPB Achievement Eco % BE Achievement FBA Achievement Valid N (listwise) 54 70 54 70 35 35

Minimum .03 .39 .04 .01 .00

Maximum 4.16 1.88 1.25 1.04 1.00

Mean 1.1461 .9498 .6861 .5484 .4190

Std. Deviation .87069 .25506 .29529 .29117 .32683

KANO Model

KANO Model Analysis

The KANO Model Analysis throws up some interesting results
Sales Achievement is a minimum expected parameter Eco Achievement is a delight parameter i.e. the parameter last focused on.

Performance Linkage Dendogram

Final Cluster Centers

Final Cluster Centers Cluster 1 2 3

Sales Achievement %
Eco % Billing Efficiency Lines Per Bill Focus Brand Achievement SSM Incentive Sales Achieved Eco Achieved Sales Target Eco Target BE Achievement LPB Achievement FBA Achievement

.92
.90 15.23 5.42 1.33 1288.89 652037.03 180.56 774479.43 200.22 .76 .90 .44

1.81
.74 13.77 6.41 1.67 1616.67 1450833.37 140.33 883333.33 190.33 .69 1.07 .56

1.31
.67 10.19 6.01 1.16 1034.21 450065.29 135.21 355263.16 201.42 .51 1.00 .39

Cluster Cross Tabulation Agencywise

Cluster Number of Case * Agency Crosstabulation

Agency
Balajee Cluster Number of Case 1 Count % within Cluster Number of Case 2 Count % within Cluster Number of Case 3 Count % within Cluster Number of Case Total Count % within Cluster Number of Case 8 25.8% 11 35.5% 12 38.7% 31 100.0% 5 26.3% 7 36.8% 7 36.8% 19 100.0% 1 33.3% 0 .0% 2 66.7% 3 100.0% 2 22.2% Manoj 4 44.4% Singhania 3 33.3% Total 9 100.0%

Chi Square Tests for Agencywise Cross Tabulation

Chi-Square Tests

Value Pearson Chi-Square Likelihood Ratio N of Valid Cases 2.081a 3.021 31

df 4 4

Asymp. Sig. (2-sided) .721 .554

a. 7 cells (77.8%) have expected count less than 5. The minimum expected count is .77.

Analysis
The cluster analysis gives us the following results
Sales Achievement is high with a low Eco and Billing Efficiency only when the Sales Target is low (as in Cluster 3) For a very Sales Achievement as in Cluster 2, all the parameters are required to be high For a long term target setting plan, Cluster 1 is ideal as it scores equally on all respects

Analysis (continued)
The agency wise cross tabulation data does not show any significant relation between clusters and agency. Hence we can assume that SSM performance is independent of its parent agency.

SSM Incentive Correspondence Analysis

Correspondence Table SSM

Sanjay Kumar Incentive 0 1-500 501-1000 1001-1500 1501-2000 2000+ Active Margin Raj Kumar 1 0 0 1 1 0 3 Rajeev Ranjan 1 0 1 2 0 0 4 Santosh Kumar 2 1 0 0 0 0 3 Krishna Sharma 1 0 0 0 0 0 1 Singh 0 2 0 0 0 0 2 Abhishek Pandey 0 1 0 3 0 0 4 Somnath Bose 0 0 1 1 2 1 5 Sanjay Verma 0 0 2 0 0 0 2 Rohit Verma 0 0 0 1 1 0 2 Santosh Agarwal 0 0 0 1 1 1 3 Mukesh Kumar 0 0 0 0 3 1 4 Dabloo 0 0 0 0 1 0 1 Shiv Shankar 0 0 0 0 0 1 1 Active Margin 5 4 4 9 9 4 35

SSM Incentive Correspondence Analysis

Analysis
If we compare the correspondence analysis to the earlier factor wise analysis we see that
Mukesh Kumar and Shiv Shankar have high Sales Achievement and high SSM Incentives Dabloo has a medium to high Sales Achievement and high Eco leading to high SSM Incentive Rohit Verma has a medium to high Sales Achievement and high Eco leading to a medium to high SSM Incentive

Regression Analysis on actual figures

Model Summary Adjusted R Model 1 R .863a R Square .745 Square .701 Std. Error of the Estimate 384.61672

a. Predictors: (Constant), Lines Per Bill, Focus Brand Achievement, Billing Efficiency, Sales Achieved, Eco Achieved

Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) Focus Brand Achievement Sales Achieved Eco Achieved Billing Efficiency Lines Per Bill a. Dependent Variable: SSM Incentive B -645.884 196.484 .001 3.620 20.780 53.593 Std. Error 403.070 79.059 .000 2.136 28.151 55.821 .274 .418 .297 .154 .119 Coefficients Beta t -1.602 2.485 2.742 1.695 .738 .960 Sig. .120 .019 .010 .101 .466 .345

Results
Despite a moderate to high R-squared value (0.745), the correlation coefficients of the target achievements in terms of actual figures are not significant. Therefore, we carry out a regression analysis in terms of percentage wise achievements

Regression Analysis on percentages

Model Summary Adjusted R Model 1 R .897a R Square .804 Square .771 Std. Error of the Estimate 337.11831

a. Predictors: (Constant), FBA Achievement, Sales Achievement %, BE Achievement, LPB Achievement, Eco %

Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) Sales Achievement % Eco % BE Achievement LPB Achievement FBA Achievement a. Dependent Variable: SSM Incentive B -849.638 327.771 653.721 818.304 312.051 774.388 Std. Error 312.974 83.227 371.302 400.547 265.044 197.531 .381 .263 .304 .115 .360 Coefficients Beta t -2.715 3.938 1.761 2.043 1.177 3.920 Sig. .011 .000 .089 .050 .249 .000

Results
We get a higher R-squared value in this case, but again certain parameters are rendered as not significant due to high internal correlation. This issue of multicollinearity can be solved if we carry out the regression analysis based on the factors obtained from factor wise analysis.

Regression analysis on factors

Model Summary Adjusted R Model 1 R .923a R Square .852 Square .841 Std. Error of the Estimate 275.17754

a. Predictors: (Constant), REGR factor score 2 for analysis 1, REGR factor score 1 for analysis 1

Coefficientsa Standardized Unstandardized Coefficients Model 1 (Constant) REGR factor score 1 for analysis 1 REGR factor score 2 for analysis 1 a. Dependent Variable: SSM Incentive 304.590 50.240 .441 6.063 .000 B 1164.516 560.431 Std. Error 49.423 50.240 .811 Coefficients Beta t 23.562 11.155 Sig. .000 .000

Results
The R-squared value is highest in this case and the data is completely significant. Therefore we can form the regression equation as Y = 560.431 (Factor 1) + 304.590 (Factor 2) where Y = SSM Incentive Factor 1,2 = Factors obtained from factor wise analysis of efficiency parameters.

L3M Growth
SSM Abhishek Pandey Mukesh Kumar Raj Kumar Rajeev Ranjan Rajeev Ranjan SO Rohit Bihari Rohit Verma Santosh Agarwal Santosh Kr. Sahoo B.E. Growth S.A. Growth Eco Growth L.P.B Growth 1.3223 .4059 2.1976 .8097 .6723 6.1235 1.3422 .8732 .3837 2.6535 .7311 .7675 .7226 2.8844 1.5651 .9328 .7517 .7695 .7832 .9449

20.9135 1.3749 .8042 .9166

23.7939 1.8535 .5114 .5224

20.2500 1.3919 1.0957 .9300

.4874 .8839 .5752 .9849

Santosh Kumar
Somnath Bose

.6931
.8141

.5632
.8452

.9464
1.1005

.8941
.8671

Analysis
L3M Growth has been calculated as the performance in one parameter from January to March to the previous performance in the same parameter from October to December. Rohit Bihari joined late in December. That is why his figures are abnormally high. This is true to a lesser extent for Abhishek Pandey and Raj Kumar

Analysis
Lines Per Bill Achievement has gone down for all SSMs in the L3M period Rajeev Ranjan and Rohit Verma have been the most consistent performers over this period across all parameters. Most of the parameters have taken a sharp dip in performance due to a high changeover of SSMs i.e. 6 out of the 11 SSMs have left their jobs. The corresponding sales data for the new SSMS would be taken for the next L3M period.

Overall Results and Analysis

There is a definite correlation between efficiency parameters and sales value targets and achievements. This can be used to develop an implementable model to drive SSM growth Further analysis needs to be carried out on the seasonal and periodic variations in SSM performance.

Thank You!